AN EMPIRICAL INVESTIGATION ON THE USE OF DERIVATIVE INSTRUMENTS BY INDUSTRIAL FIRMS IN TURKEY

This study examines the factors related to the use of derivative instruments by non-financial firms in Turkey. The analysis is based on a sample of 115 firms listed on the Borsa İstanbul Industrial Index (XUSIN) between the years 2009 and 2014. Generally, it is found that derivative instruments are used by 35 percent of the sample. The results from univariate tests and logistic regression analysis show that the use of derivatives is positively associated with leverage and firm size. In addition, earnings volatility and net profit margin are negatively associated with the firm use of derivatives. However the data does not provide sufficient evidence linking the use of derivative instruments to the firm value.