Does Profitability Cause the Changes in Stock Prices? Evidence from the Turkish Banking Stocks
Journal Title: Journal of Corporate Governance, Insurance, and Risk Management - Year 2022, Vol 9, Issue 2
Abstract
Stock prices reflect the future for investors. Profit and profitability ratios are considered as the data of the enterprises’ past. Accordingly, whether investors make investments decisions regarding profit and profitability factors and they cause the changes in stock prices are crucial issues to be examined. The aim of the study is to investigate the causality between several profitability factors and the change in the prices of banking stocks by performing the Emirmahmutoğlu & Köse (2011) bootstrap causality test on the quarterly data obtained from six commercial banks in Turkey over the period 2010: Q1 – 2020: Q4. The findings of the study reveal that especially the earnings per share figures account for the changes in the stock price of the banks. Nonetheless, such a causal relationship can be detected for neither return on assets nor return on equity.
Authors and Affiliations
Hatice Elanur Kaplan, Şenol Babuşcu, Adalet Hazar
Keywords
Related Articles
- EP ID EP732691
- DOI https://doi.org/10.56578/jcgirm090205
- Views 66
- Downloads 0
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Does Profitability Cause the Changes in Stock Prices? Evidence from the Turkish Banking Stocks
Stock prices reflect the future for investors. Profit and profitability ratios are considered as the data of the enterprises’ past. Accordingly, whether investors make investments decisions regarding profit and profitabi...