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Financial Crisis and Firm Performance: empirical evidence from Turkey

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  • Halit Gonenc
  • C. Bulent Aybar

Abstract

The objective of this study is to examine the impact of concentrated ownership and business group affiliation on the performance of Turkish firms during the financial crisis by controlling balance sheet currency exposure, international involvement and firm size. Our analysis focuses on a 12‐month window encapsulating the February 2001 financial crisis. Our findings show that balance sheet exposure is the key determinant of the firm performance during the crisis periods. While we find evidence that firms with higher concentrated ownership experience lower stock market performance prior and during the financial crisis, business group affiliation does not have any impact on the performance. However, there is weak evidence that stock market performance increases with the level of business group diversification.

Suggested Citation

  • Halit Gonenc & C. Bulent Aybar, 2006. "Financial Crisis and Firm Performance: empirical evidence from Turkey," Corporate Governance: An International Review, Wiley Blackwell, vol. 14(4), pages 297-311, July.
    • Handle: RePEc:bla:corgov:v:14:y:2006:i:4:p:297-311
    DOI: 10.1111/j.1467-8683.2006.00508.x
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    1. Guillermo A. Calvo & Carmen M. Reinhart, 2000. "Fixing for Your Life," NBER Working Papers 8006, National Bureau of Economic Research, Inc.
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    1. Esther Del Brio & Elida Maia-Ramires & Alberto De Miguel, 2011. "Ownership structure and diversification in a scenario of weak shareholder protection," Applied Economics, Taylor & Francis Journals, vol. 43(29), pages 4537-4547.
    2. An Buysschaert & Marc Deloof & Marc Jegers & An Rommens, 2008. "Is Group Affiliation Profitable in Developed Countries? Belgian Evidence," Corporate Governance: An International Review, Wiley Blackwell, vol. 16(6), pages 504-518, November.
    3. Zhang, Wenwen & Chiu, Yi-Bin & Hsiao, Cody Yu-Ling, 2022. "Effects of country risks and government subsidies on renewable energy firms’ performance: Evidence from China," Renewable and Sustainable Energy Reviews, Elsevier, vol. 158(C).
    4. Taewoo Kim & Hyuk Shawn, 2022. "Conservative Financial Reporting and Resilience to the Financial Crisis," Sustainability, MDPI, vol. 14(14), pages 1-11, July.
    5. Chen, Chiung-Jung & Yu, Chwo-Ming Joseph, 2012. "Managerial ownership, diversification, and firm performance: Evidence from an emerging market," International Business Review, Elsevier, vol. 21(3), pages 518-534.
    6. P.O. van der Meer & Y.K. Grift, 2012. "An exploratory study on firm performance during the credit crunch: what do bankers think?," Working Papers 12-25, Utrecht School of Economics.
    7. Banu Dincer, 2012. "The Foreign Equity in Banking Industry and the Effectiveness of Corporate Governance: Essential or a Soap Opera?," International Journal of Academic Research in Accounting, Finance and Management Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Accounting, Finance and Management Sciences, vol. 2(4), pages 339-352, October.

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