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Determinants of Derivative Product Usage in Financial Risk Management of Firms Registered on Borsa Istanbul Manufacturing Industry Index

Author

Listed:
  • Serkan CANKAYA
  • Cengiz GUCVER

Abstract

In this study, Panel logistic regression analysis is used to examine on-balance sheet and/or off-balance sheet factors that affect the decision to use derivative products for firms listed in Borsa Istanbul (BIST) manufacturing industry index between the years of 2007 and 2016. The result of the study shows that there is a significant relationship between firms’ asset size, liquidity ratio, leverage ratio, financial debt to total debt ratio, market value, ratio of foreign sales to total sales, ratio of tax payments to net profitability, corporate governance index inclusion and the use of derivative products, however, there is no significant relation between return on asset, net profit margin, return on equity, net foreign currency position ratio and the use of derivative products.

Suggested Citation

  • Serkan CANKAYA & Cengiz GUCVER, 2019. "Determinants of Derivative Product Usage in Financial Risk Management of Firms Registered on Borsa Istanbul Manufacturing Industry Index," Journal of BRSA Banking and Financial Markets, Banking Regulation and Supervision Agency, vol. 13(2), pages 185-213.
    • Handle: RePEc:bdd:journl:v:13:y:2019:i:2:p:185-213
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    File URL: http://www.bddk.org.tr/Content/docs/bddkDergiEn/dergi_0026_05.pdf
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    More about this item

    Keywords

    Manufacturing Industry; Derivatives; Panel Logistic Regression; HuberWhite Robust Standart Errors;
    All these keywords.

    JEL classification:

    • C13 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Estimation: General
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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