Political uncertainty and financial performance: an example on bist

The purpose of the study is to examine the effects of political uncertainty on financial performance. For this purpose, the study consists of 147 firms operating in the industrial sector in Istanbul Stock Exchange (BIST) for the period of 2008-2013. The relationship between political uncertainty and financial performance has been analyzed for the quarter data period by using panel data analysis. Analysis indicated that there is no statistically significant relationship between the 29th of March 2009 General election of local administrations variable and the 12th of September 2010 constitutional amendment referendum variable as an indicator for the political uncertainty and financial performance indicators, although there is a negative statistically significant relationship between the 12th of June 2011 Parliamentary general election variable as an indicator for the political uncertainty and financial performance indicators. This result confirms the proposition that" election uncertainty may reduce the company's performance due to the inefficient allocation of capital channel". This result also sends a strong message that political uncertainty has a significant impact on real economic outcomes. This founding implying that firm manager and investors not perceive the 29th of March 2009 General election of local administrations and the 12th of September 2010 constitutional amendment referendum as an uncertainty sources, but perceive the 12th of June 2011 Parliamentary general election as an uncertainty sources. The study examining the impact of political uncertainty on firms' financial performance on has not been found. This aspect of the study is expected to fill this gap in the literature