Exploring the Causal Linkage Between Foreign Equity Investments and BIST 100 Index
Journal Title: Journal of Corporate Governance, Insurance, and Risk Management - Year 2023, Vol 10, Issue 2
Abstract
This study examines the interrelation between foreign equity investments (FEIs) and the BIST 100 index, a pivotal indicator of the Turkish economy's overall performance. Given Turkey's emergence as a market with considerable potential returns, this analysis is particularly pertinent. The focus is on the volume of shares held by international investors in Borsa Istanbul and its impact on the BIST 100 index. Data spanning 924 weeks, from 2006 to 2023, form the empirical basis of this investigation. Stationarity of variables was assessed using the Augmented Dickey-Fuller (ADF) and Phillips-Peron (PP) unit root tests. The direction of causality between the studied variables was determined via a Granger causality test, employing a Vector Autoregressive (VAR) model. Findings reveal a bidirectional causality between the returns of the BIST 100 index and FEIs, aligning with prevailing hypotheses that posit a connection between foreign equity flows and stock market indices. This relationship underscores the integral role of international investments in shaping market dynamics within emerging economies. The study contributes to the understanding of financial market interdependencies, highlighting the significance of foreign investments in the context of a developing economy's stock market.
Authors and Affiliations
Aykut Güryel, Veysel Kula
Keywords
Related Articles
- EP ID EP732713
- DOI https://doi.org/10.56578/jcgirm100206
- Views 55
- Downloads 0
The Impact of Managerial Sustainability and Ethics on Corporate Success
This investigation underscores the pivotal role of managerial sustainability and ethical practices in enhancing corporate success. Utilizing a comprehensive approach, the study amalgamates, interprets, and exemplifies pe...
Investor Overreaction in the BIST Sustainability Index: An Empirical Analysis from 2014-2022
Recent emphasis on environmental stewardship by stakeholders has escalated demands for disclosures on social and environmental impacts from environmentally detrimental companies, underscoring the significance of sustaina...
Estimating Financial Failure in Businesses Using Artificial Neural Networks: Turkish Manufacturing Industry Model Study
Businesses need to be financially successful to achieve sustainable growth and maximise firm value. The financial failure of businesses is a situation that is carefully monitored by business managers, shareholders of the...
Enhancing the Golden Triangle (Cost, Time, Quality) in Infrastructure Projects through Risk Management: A Case Study of the Algiers Metro Project
The Golden Triangle consisting of cost, time and quality serves as a fundamental framework for assessing the success of infrastructure projects. Effective risk management is critical for optimising these interconnected d...
Evaluating the Influence of CEFTA Membership on Financial Integration: An Empirical Panel Data Analysis
This investigation elucidates the correlation between membership in a Free Trade Agreement (FTA) and the degree of financial integration among Central European Free Trade Agreement (CEFTA) countries. A particular emphasi...