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 48
- Downloads 0
Impact of COVID-19 on Audit Risk Assessment Procedures: Insights from Malta
This investigation explores the transformative effect of the COVID-19 pandemic on the risk assessment processes employed by auditors. The primary focus is on how the pandemic has reshaped the identification and evaluatio...
Navigating Uncertainty in Public-Sector Project Portfolios: Risk Management in Resource-Constrained Environments
Risk management in public-sector project portfolios within developing economies remains an understudied yet critical area, particularly in the context of resource-constrained administrative environments. This study exami...
The Nexus Between Urbanization, Renewable Energy, Financial Development, and Economic Growth: Evidence from Turkey
This study aims to analyze the relationship between renewable energy production and financial development, urbanization, and economic growth in the 1980-2020 period of the Turkish economy, which draws attention to its hi...
A Conceptual Approach to Exploring Board Effect on CSR Responsiveness
Our aim is to design a conceptual model illustrating the impact of corporate boards on corporate social responsibility (CSR). Scholars and researchers from various disciplines have all pointed out the increasing importan...
Enhancing Financial Integrity in Ghanaian Microfinance Institutions Through Forensic Auditing: Assessing Its Role in Fraud Reduction
Microfinance institutions (MFIs) play a critical role in promoting financial inclusion and driving economic growth, especially in developing economies. However, the prevalence of fraud has increasingly threatened the sta...