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Article
Publication date: 3 September 2024

Yilmaz Bayar, Valentin Toader, Marius Dan Gavriletea and Oguzhan Yelkesen

Sustainable development is considered a key factor in addressing environmental issues, global inequalities and poverty. This study aims to investigate the impact of stock market…

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Abstract

Purpose

Sustainable development is considered a key factor in addressing environmental issues, global inequalities and poverty. This study aims to investigate the impact of stock market indicators on sustainable development across 16 emerging markets from 2003 to 2020.

Design/methodology/approach

The research uses causality and cointegration analyses to explore the relationships between stock market indicators and sustainable development.

Findings

Univariate causality analysis reveals a bidirectional causal relationship between the stock market turnover ratio and sustainable development, as well as a unidirectional relationship from sustainable development to stock market capitalization and total value traded. Panel-level cointegration analysis suggests that only stock market capitalization has a weak positive influence on sustainable development. However, the impact of stock market indicators on sustainable development varies significantly among countries, as revealed by country-level cointegration analysis.

Research limitations/implications

While this study provides valuable insights, it is not without limitations. The findings are limited to the selected emerging markets and the specified timeframe (2003–2020). The complexity of factors influencing sustainable development suggests the need for further exploration in diverse contexts.

Practical implications

Understanding the nuanced relationships between stock market indicators and sustainable development can offer valuable insights for policymakers, investors and stakeholders.

Originality/value

This research contributes to the existing literature by examining the multifaceted connections between stock market indicators and sustainable development, focusing on country-specific causality relationships. The study highlights the reciprocal nature of this relationship, where financial market development can both influence and be influenced by a country's progress toward sustainability. This approach provides a more nuanced understanding of the complex interaction between stock market maturity and sustainability goals.

Details

International Journal of Islamic and Middle Eastern Finance and Management, vol. 17 no. 6
Type: Research Article
ISSN: 1753-8394

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Article
Publication date: 16 December 2020

Mirela Oana Pintea, Andreea Mădălina Pop, Marius Dan Gavriletea and Ioana Cristina Sechel

The purpose of this research is to evaluate the impact of adopting the principles of corporate governance on the financial performance of companies listed on the Bucharest Stock…

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Abstract

Purpose

The purpose of this research is to evaluate the impact of adopting the principles of corporate governance on the financial performance of companies listed on the Bucharest Stock Exchange (BSE). To assess the implementation of corporate governance principles, the authors built an index based on the principles specified in the BSE Corporate Governance Code (CGC).

Design/methodology/approach

An econometric analysis was conducted to estimate the impact that the authors’ corporate governance indicator had on financial performance, measured successively through Tobin's Q, return on equity (ROE), economic value added (EVA) and total shareholder return (TSR).

Findings

Following the regression model, the authors noticed the absence of a significant impact of corporate governance practices on performance measured by ROE, EVA and TSR but instead, a significant and positive relationship for Tobin's Q rate was found.

Research limitations/implications

Due to the lack of data before the implementation of the BSE Code of Corporate Governance, the research period is limited to 2010–2015, but the authors’ future studies will try to extend the research period.

Originality/value

Although numerous studies have been conducted to analyze the empirical relationship between corporate governance and financial performance, no conclusive results have been obtained. The diversity of these findings can refer to methods used in the construction of a corporate governance measure as well as to the accuracy of financial reporting.

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