The Relationship between Corporate Profitability and Macroeconomic Indicators: Evidence from 500 Largest Industrial Organizations in Turkey

  •  Ferhan Emir Tuncay    
  •  Hulya Cengiz    


The purpose of this study is to examine the impact of chosen macroeconomic indicators on industrial corporate performance. In the analysis, economic profitability ratios of Turkey’s top 500 industrial firms, which represent the Turkish economy, have been used to estimate performance. In order to determine the effects of macroeconomic indicators, panel data with a non-linear instrumental variables estimator, Arellano Bond generalized methodology of moments (GMM) was used between the period of 2002 and 2012. As a result of the analysis, gross domestic product, inflation rate, the rate of domestic debt interest payments to the net new borrowing and the rate of domestic debt interest payments to total income tax have a direct relationship with corporate performance. On the other hand, exchange rate, interest rate and the rate of short term foreign debts to central bank international reserves have an inverse relationship.

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