IDEAS home Printed from https://ideas.repec.org/a/ahs/journl/v9y2024i2p230-253.html
   My bibliography  Save this article

Exploring the Impacts of Financial Failure Risk on Sustainable Growth Policies: Evidence from the BIST Sustainability Index Companies

Author

Listed:
  • Fatih Güzyurdu
  • Serdar Yaman

Abstract

This study investigates the impacts of financial failure risk on firms' sustainable growth policies using econometric analysis and aims to identify suitable financial failure models for the sustainable growth policies developing process. The study covers data from 38 non-financial firms listed in the Borsa Istanbul Sustainability Index (XUSRD) for 2010-2022. Sustainable growth is calculated by Higgins's (1977) sustainable growth rate (HSGR), while financial failure risks are assessed through Altman's (1983) Z'-score, Springate (1978) S-score, Taffler (1983) T-score, Fulmer et al. (1984) H-score and Legault (1987) CA-score models. The econometric approach employs a five-stage panel data methodology, including the pre-tests of multi-collinearity, cross-sectional dependency, slope homogeneity, stationarity, autocorrelation, and heteroskedasticity. Panel regression results reveal positive relationships between financial success and sustainable growth. However, the statistical significance of these relationships varies across different financial failure models. The effects of T and H-scores are statistically significant, whereas Z', S, and CA-scores do not exhibit statistically significant effects. Consequently, the findings suggest that T and H-score models should be prioritized in sustainable growth policy development.

Suggested Citation

  • Fatih Güzyurdu & Serdar Yaman, 2024. "Exploring the Impacts of Financial Failure Risk on Sustainable Growth Policies: Evidence from the BIST Sustainability Index Companies," Journal of Research in Economics, Politics & Finance, Ersan ERSOY, vol. 9(2), pages 230-253.
    • Handle: RePEc:ahs:journl:v:9:y:2024:i:2:p:230-253
    DOI: 10.30784/epfad.1431693
    as

    Download full text from publisher

    File URL: https://dergipark.org.tr/tr/download/article-file/3706865
    Download Restriction: no
    File URL: https://libkey.io/10.30784/epfad.1431693?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Yuzo Honda, 1985. "Testing the Error Components Model with Non-Normal Disturbances," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 52(4), pages 681-690.
    2. Beck, Nathaniel & Katz, Jonathan N., 1995. "What To Do (and Not to Do) with Time-Series Cross-Section Data," American Political Science Review, Cambridge University Press, vol. 89(3), pages 634-647, September.
    3. Levin, Andrew & Lin, Chien-Fu & James Chu, Chia-Shang, 2002. "Unit root tests in panel data: asymptotic and finite-sample properties," Journal of Econometrics, Elsevier, vol. 108(1), pages 1-24, May.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Meng, Chang & Ghafoori, Noorulhaq, 2024. "The economic impact of terrorism in South Asia," Socio-Economic Planning Sciences, Elsevier, vol. 96(C).
    2. Fertő, Imre, 2013. "Intra-industry trade for agri-food products in the enlarged European Union," 87th Annual Conference, April 8-10, 2013, Warwick University, Coventry, UK 158846, Agricultural Economics Society.
    3. Aladejare, Samson Adeniyi, 2022. "Natural resource rents, globalisation and environmental degradation: New insight from 5 richest African economies," Resources Policy, Elsevier, vol. 78(C).
    4. Paetzold, Jörg, 2012. "The Convergence of Welfare State Indicators in Europe: Evidence from Panel Data," Working Papers in Economics 2012-4, University of Salzburg.
    5. Mara, Eugenia Ramona, 2021. "Drivers of the shadow economy in European Union welfare states: A panel data analysis," Economic Analysis and Policy, Elsevier, vol. 72(C), pages 309-325.
    6. Kentaka Aruga, 2019. "Investigating the Energy-Environmental Kuznets Curve Hypothesis for the Asia-Pacific Region," Sustainability, MDPI, vol. 11(8), pages 1-12, April.
    7. Ahmed, Walid M.A., 2020. "Corruption and equity market performance: International comparative evidence," Pacific-Basin Finance Journal, Elsevier, vol. 60(C).
    8. Niklas Potrafke, 2012. "Political cycles and economic performance in OECD countries: empirical evidence from 1951–2006," Public Choice, Springer, vol. 150(1), pages 155-179, January.
    9. Thibault Darcillon, 2016. "Do Interactions between Finance and Labour Market Institutions Affect the Income Distribution?," LABOUR, CEIS, vol. 30(3), pages 235-257, September.
    10. Canh Phuc Nguyen & Christophe Schinckus & Thanh Dinh Su, 2020. "The drivers of economic complexity: International evidence from financial development and patents," International Economics, CEPII research center, issue 164, pages 140-150.
    11. Plessen-Mátyás, Katharina & Kaufmann, Christoph & von Landesberger, Julian, 2021. "Funding behaviour of debt management offices and the ECB’s public sector purchase programme," Working Paper Series 2552, European Central Bank.
    12. Bruno Amable & Donatella Gatti & Elvire Guillaud, 2008. "How does Party Fractionalization convey Preferences for Redistribution in Parliamentary Democracies?," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00348878, HAL.
    13. Miomir Jovanović & Ljiljana Kašćelan & Aleksandra Despotović & Vladimir Kašćelan, 2015. "The Impact of Agro-Economic Factors on GHG Emissions: Evidence from European Developing and Advanced Economies," Sustainability, MDPI, vol. 7(12), pages 1-21, December.
    14. de Mendonça, Helder Ferreira & de Oliveira, Diego S.P., 2019. "Firms' confidence and Okun's law in OECD countries," Economic Modelling, Elsevier, vol. 78(C), pages 98-107.
    15. Rocha, Roberto & Morales, Marco & Thorburn, Craig, 2008. "An empirical analysis of the annuity rate in Chile," Journal of Pension Economics and Finance, Cambridge University Press, vol. 7(1), pages 95-119, March.
    16. Di-Marcantonio, Federica & Morales-Opazo, Cristian & Barreiro-Hurlé, Jesús & Demeke, Mulat, 2014. "Determinants of food production in Sub Saharan Africa: the impact of policy, market access and governance," 2014 International Congress, August 26-29, 2014, Ljubljana, Slovenia 182683, European Association of Agricultural Economists.
    17. Imre Fertő & Szilárd Podruzsik & Jeremiás Balogh, 2016. "Intra-industry trade in the wine sector in the enlarged European Union," Review of Agricultural, Food and Environmental Studies, Springer, vol. 97(3), pages 159-172, November.
    18. Sherif. M. Hassan & John M. Riveros Gavilanes, 2021. "First to React Is the Last to Forgive: Evidence from the Stock Market Impact of COVID 19," JRFM, MDPI, vol. 14(1), pages 1-25, January.
    19. Degryse, H.A. & Havrylchyk, O. & Jurzyk, E. & Kozak, S., 2009. "Foreign Bank Entry and Credit Allocation in Emerging Markets," Other publications TiSEM fa54a876-1262-44c9-8099-7, Tilburg University, School of Economics and Management.
    20. M. Ajide, Folorunsho & A. A. Soyemi, Kenny, 2022. "Oil rent, entrepreneurial start-ups, and institutional quality: Insights from African oil-rich countries," Working Papers 20, Department of Economics, University of Ilorin.

    More about this item

    Keywords

    Sustainable Growth; Financial Failure Risk; BIST Sustainability Index; Panel Data Analysis;
    All these keywords.

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G33 - Financial Economics - - Corporate Finance and Governance - - - Bankruptcy; Liquidation
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ahs:journl:v:9:y:2024:i:2:p:230-253. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Ersan Ersoy (email available below). General contact details of provider: https://epfjournal.com/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.