Does financial flexibility enhance firm value? A comparative study between developed and emerging countries

dc.contributor.authorBilyay Erdoğan, Seda
dc.date.accessioned2020-12-17T20:38:50Z
dc.date.available2020-12-17T20:38:50Z
dc.date.issued2020
dc.departmentFakülteler, İşletme Fakültesi, Uluslararası Ticaret ve Finans Bölümüen_US
dc.description.abstractThis paper investigates the effect of financial flexibility on firm value, on a comparative basis between developed and emerging countries in Europe. Our dataset covers 4,334 companies from 15 developed and 1,436 companies from 6 emerging countries in Europe for the period between 2000 and 2016. First, depending on companies’ maintenance of leverage that is below-predicted levels for a successive number of years, I identify the financially flexible companies in the sample. Second, I examine whether financial flexibility affects firm value. Our results demonstrate that firms’ financial flexibility positively contributes to firm value in all estimations. Furthermore, this study presents unprecedented evidence that the effect of financial flexibility on firm value is more significant for emerging countries when compared to developed countries in Europe. Moreover, I demonstrate for the first time that firm characteristics, including firm size and age, which proxy for asymmetric information within a company, negatively moderate the relationship between flexibility and firm value. Managers, both in developed and in emerging countries, who aim to surge their firm value up, should give importance to the maintenance of financial flexibility in their capital structure decisions. Last, managers of relatively smaller and younger companies should put more emphasis on becoming financially flexible if they want to improve their firms’ value.en_US
dc.identifier.citation7
dc.identifier.doi10.3846/btp.2020.12680en_US
dc.identifier.endpage736en_US
dc.identifier.issn1648-0627en_US
dc.identifier.issn1648-0627
dc.identifier.issue2en_US
dc.identifier.scopus2-s2.0-85095691709en_US
dc.identifier.scopusqualityQ3
dc.identifier.startpage723en_US
dc.identifier.urihttps://hdl.handle.net/20.500.12469/3566
dc.identifier.urihttps://doi.org/10.3846/btp.2020.12680
dc.identifier.volume21en_US
dc.identifier.wosqualityN/A
dc.institutionauthorBilyay Erdoğan, Sedaen_US
dc.language.isoenen_US
dc.publisherVGTUen_US
dc.relation.journalBusiness: Theory and Practiceen_US
dc.relation.publicationcategoryMakale - Uluslararası Hakemli Dergi - Kurum Öğretim Elemanıen_US
dc.rightsinfo:eu-repo/semantics/openAccessen_US
dc.subjectEmerging and developed countriesen_US
dc.subjectFinancial flexibilityen_US
dc.subjectFirm valueen_US
dc.subjectGMMen_US
dc.subjectLeverageen_US
dc.titleDoes financial flexibility enhance firm value? A comparative study between developed and emerging countriesen_US
dc.typeArticleen_US
dspace.entity.typePublication

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