Mine Hatice Aksu

Transparency and Disclosure Scores and Their Determinants in the Istanbul Stock Exchange

Recent financial reporting and auditing scandals on both sides of the Atlantic have led to a global realization of the importance of sound corporate governance (CG) practices in alleviating the agency problems in the corporate form of business and for efficient allocation of capital in international markets. Transparency and disclosure (T&D) practices followed by firms are an important component and a leading indicator of CG quality. Transparent and full-disclosure of information is especially vital for Turkey where external capital is necessary to sustain the high growth rate and the biggest agency problem centers on asymmetric information and expropriation by majority shareholders. We collaborate with Standard and Poors (S&P) and base our survey on their scoring methodology, a customized version of the 98 desirable T&D attributes they used in several other countries, and their classification of the attributes into three categories: ownership structure and investor relations, financial transparency and information disclosure, and board and management structures and processes. We evaluate the T&D practices of the 52 largest and most liquid firms in the Istanbul Stock Exchange (ISE), based on their English and local language annual reports and websites. Our rankings provide a first time, objective assessment of the corporate disclosure practices of ISE firms and uncover that they are, at best, moderate and vary with respect to the three sub-categories of T&D. We also consider a simple model that sequentially links agency problems to CG/T&D mechanisms in place which, in turn impact firm-level and economy-wide financial performance. Concentrating on the causal side of the model - the determinants of T&D scores -, we provide out-of-sample evidence that among the commonly used proxies for agency conflicts, firm size, financial performance, market-to-book equity best explain the variation in T&D scores in the ISE. While our results provide considerable support for prior findings in developed markets, they also shed light on how specific agency problems faced by the ISE firms impact their T&D scores.

The Impact of IFRS Adoption and Corporate Governance Principles on Transparency and Disclosure: The Case of Borsa Istanbul

ABSTRACT This article investigates whether mandatory and voluntary regulation and best governance practices enhance disclosure quality in an emerging market where code law tradition, dominant family ownership, and lax rules and implementation make it less likely for disclosure quality effects to be observed. We show that the Transparency & Disclosure (T&D) scores have improved for a sample of Borsa Istanbul (BIST) firms, and the firms that voluntarily adopted IFRS during 2003 and 2004 have significantly higher scores. However, in 2005, the year IFRS became mandatory, the T&D scores for mandatory and voluntary adopters were no longer significantly different. Multivariate analysis shows that the Corporate Governance (CG) principles and voluntary and mandatory adoptions of IFRS have all had significant positive effects on various T&D scores of the sample firms.

Technology investments, performance and the effects of size and region in Turkish hospitals

This study investigates the effects of technology investments on cost and quality performance and whether hospital size and region have a moderating effect on this relationship. The results are based on responses from 798 managers surveyed in 390 hospitals throughout Turkey. The findings reveal that information/office and clinical technologies have a statistically significant effect on a hospitals cost and quality performance. Furthermore, hospital size has a robust and statistically significant positive (negative) effect on the clinical technology–performance (info/office technology–performance) relationship. Finally, although being located in a developed region enhances hospital performance, it does not have a moderating effect on the technology–performance relationship.

Ownership Concentration, IFRS Adoption and Earnings Quality: Evidence from an Emerging Market

We investigate the impact of corporate governance characteristics, and IFRS on earnings quality in Borsa Istanbul (BIST). Our contribution stems from the fact that we study moderating effects of mandatory IFRS adoption on the relationship between ownership concentration and earnings quality in a setting characterized by low minority ownership rights protection and high ownership concentration in the form of family-owned pyramids, in a code law country with lax rules and weak enforcement. We use a unique data set that is hand collected. We find strong first time evidence for low persistence of earnings and high earnings management and that ownership concentration impedes earnings quality while foreign ownership enhances it. Mandatory IFRS adoption has had a strong positive effect on earnings persistence and a weaker effect on earnings management. However, the impact of IFRS in reducing the negative impact of only family type ownership concentration is noteworthy.

VALUE RELEVANCE OF TROUBLED DEBT RESTRUCTURINGS AND POLICY IMPLICATIONS

This paper investigates the beneficial economic consequences and market and accounting based valuation effects of troubled debt restructurings (TDRs) in financially distressed debtor firms. Relying on the implications of prior research and extant valuation theories, some empirical evidence on the beneficial outcomes and informativeness of TDR is first provided: significantly positive restructuring interval excess returns and higher excess returns to subsequently consummated restructurings and subsequent survivors. The market reaction to “full-settlement” and “modification of terms” types of TDR are also measured to evaluate the consistency of the FASB’s binary classification and recognition criteria with the market participants’ assessments. Finally, a valuation model conditional on book values and earnings is used to test the value relevance of the reported financial statement bottom lines and TDR related disclosure. The findings suggest that modifications are at least as beneficial and informative as full settlements. Hence, the recognition of the reduction in the liability and the related gain in the financial statements of firms that undertake modifications would be more congruent with the valuation effects assessed by market participants.