Yatırım Harcamaları ve Finansal Esneklik İlişkisi: Borsa İstanbul Üzerine Bir İnceleme
The Relationship Between Investment Expenditures and Financial Flexibility: A Study on Borsa Istanbul

Summary/Abstract: Purpose – Financial flexibility, which expresses the ability of a company to mobilize its financial resources against uncertain future situations, is especially important in terms of maximizing firm value by enabling companies in underdeveloped and developing countries to respond quickly and on time to profitable investment opportunities. The aim of this study is to determine whether there is a relationship between financial flexibility and capital expenditures. Design/methodology/approach – In this study, three different models were created in which capital expenditures (CE) are considered as the dependent variable. Based on the relevant literature, firms with low leverage ratio (LL) and/or holding high cash (HC) were accepted as financially flexible firms. Therefore, low leverage (LL) in Model 1, high cash (HC) in Model 2, and low leverage-high cash (LLHC) in Model 3 are included in the analysis as independent variables. Return on assets ratio, asset structure, growth opportunities, firm size and cash flow rate were used as control variables in the models. Based on the 9-year data of 197 companies traded in Borsa Istanbul between 2012 and 2020, a panel containing 1,773 observations was created. The data were analyzed by panel data analysis method. Eviews 10 and Stata 15 package programs were used in the empirical analysis. Findings – As a result of the panel data regression analysis, it was determined that approximately 27% of the firms have financial flexibility by having low leverage ratio and high cash holdings at the same time, and there was a positive increase in the capital expenditures of firms with financial flexibility. In addition, a positive and statistically significant relationship was observed between capital expenditures and only low leverage and, only high cash holdings. Discussion – The results indicate that firms are able to provide financial flexibility through low leverage – high cash holdings and thus have the opportunity to finance profitable investment opportunities without difficulty in obtaining funds.

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