Financialization and Manufacturing Firm Profitability under Uncertainty and Macroeconomic Volatility: Evidence from an Emerging Market

Fırat Demir

86 citations0/0 files storedReview of Development Economics

No readable copy stored yet — this record is metadata only.

No open-access location is known for this record yet.

Literature note Cite in a project Citation map

Housing, Finance, and Neoliberalism Corporate Finance and Governance Risk Management in Financial Firms

Abstract

Abstract Using semi‐annual data from 1993 to 2003 for all publicly traded manufacturing firms in Turkey, this paper explores the impacts of macroeconomic uncertainty and external shocks on profitability of real sector firms in the presence of multiple investment options in both real and financial sectors. The paper argues that increasing availability and accessibility of investment opportunities in the financial markets help real sector firms sustain profit margins despite market rigidities, increasing goods market competition, or higher levels of risks. The empirical results based on dynamic panel estimations show that increasing macroeconomic uncertainty and volatility have a significantly negative effect on firm profitability. In contrast, increasing the share of financial investments in total assets is found to be reducing such negative effects at a statistically and economically significant level.

Paper brief

Loading…

Cite this work

Citation unavailable for this work.

BibTeX RIS CSL-JSON

No public copy is stored for this record, so only the metadata is cited.

Citations in this library

Citation map →

Stored only when both papers are in the corpus — 86 citations exist upstream.

References

1991Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations 1998Initial conditions and moment restrictions in dynamic panel data models 1995Another look at the instrumental variable estimation of error-components models 1995Initial conditions and moment restrictions in dynamic panel data models 2003The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry Productivity 2004A finite sample correction for the variance of linear efficient two-step GMM estimators 1999Exceptional exporter performance: cause, effect, or both?1990Irreversibility, Uncertainty, and Investment

Cited by

2019Determinants of firm profitability in the Croatian manufacturing industry: evidence from dynamic panel analysis 2021Whither corporate financialization? A literature review 2021Impacts of the financialization of manufacturing enterprises on total factor productivity: empirical examination from China's listed companies 2023The impact of idiosyncratic risk on corporate financialisation——Evidence from China 2021

Explore the map →

Papers that cite the same references — the relational fallback while embeddings are still backfilling.

Imported from OpenAlex (CC0) — nothing here is generated.