A STUDY ON THE ANALYSIS OF THE RELATIONSHIP BETWEEN SUSTAINABILITY AND FINANCIAL PERFORMANCE IN ISTANBUL STOCK EXCHANGE

Abstract

The concept of sustainability, which has been following companies and investors lately, includes not only increasing the economic profit in the activities carried out but also protecting the environment and transferring the resources to future generations by using them effectively. The concept of sustainability can affect the activities, costs, functioning, and financial performance of the company in terms of its content. This study, it is aimed to investigate the relationship between financial performance and sustainability. In order to realize the purpose of the study, an application was made using the panel regression analysis and quarterly data covering the period of December 2015 – September 2021 of 218 companies, except for the financial institutions trading in the Istanbul Stock Exchange Equity Market. As the dependent variable, the return on assets ratio represents the firm performance, the dummy variable is included in the ISE Sustainability Index as the independent variable, and the leverage ratio and the firm size as the control variable were used. As a result of the analysis, findings were obtained that sustainability and leverage ratio negatively affect firm performance.