The relationship between competitive advantage in health products and stock returns of healthcare enterprises: The case of BIST

Health products are medical that medical equipment used for the diagnosis and treatment of diseases. The production of these supplies with national resources is an important indicator for measuring the quality of health care supply in a country. Attaining a competitive advantage in health products will contribute to the financial performance (efficiency, profitability, etc.) of companies operating in this sector. This study aims to determine the relationship between Turkiye's revealed comparative advantage in health products and the stock returns of health businesses listed on the BIST. First, Turkey's revealed comparative advantage scores in health products were calculated using the Balassa and Vollrath indices. To calculate the Balassa and Vollrath indices, domestic export levels of the product at the 3rd and 4th levels of SITC Revise and the world export levels of the same product were used as variables. Then, the relationship between the average stock returns of eight healthcare companies operating in Borsa Istanbul and the degree of revealed comparative advantage of healthcare products is examined using cointegration analysis methods. The data set consists of monthly data for the period 2000-2022. In the analysis phase, 29 different health products and 8 health companies traded on the BIST were used. According to the analysis results obtained in the first stage, Turkey was found to have a competitive disadvantage in 26 out of 29 health product groups. It was concluded that the products with a competitive advantage are HS 7311, HS 7324, and HS 9402 coded products. These products are of low added value (iron and steel health protective equipment/containers and surgical/dentist tables/chairs) in nature. According to the results obtained from the second stage, it was determined that there is a cointegration relationship between the average stock returns of health businesses listed on the BIST and the revealed comparative advantage coefficients of health products in their production portfolio. Accordingly, there is a cointegration relationship between ANGEN's average stock return and the Vollrath index of HS 9019 coded product group; DEVA's average stock return and the Vollrath index scores of HS 2936, HS 2941, HS 3003, HS 3004, and HS 3006 product groups; ECILC's average stock return and the Vollrath index scores of HS 2936, HS 2941, HS 3003, HS 3004, and HS 3006 product groups; GENIL's average stock return and the Vollrath index scores of HS 3003 coded product group; MEDTR's average stock return and the Vollrath index scores of HS 9020 coded product group; RTALB's average stock return and the Vollrath index scores of HS 9019 coded product group; SEYKM's average stock return and the Vollrath index scores of HS 3005, HS 3808, and HS 9020 coded product groups; and finally, TRILC's average stock return and the Vollrath index scores of HS 2936, HS 3003, and HS 3004 coded product groups. It was also determined that there is a cointegration relationship between the average stock returns of health businesses that produce the same product group and the Vollrath index values of that product. Accordingly, there is a cointegration relationship between the Vollrath index score of HS 2936 coded product group and the average stock returns of DEVA-ECILC-TRILC; the Vollrath index score of HS 2941 product group and the average stock returns of DEVA and ECILC; the Vollrath index score of HS 3002 product group and the average stock returns of RTALB and TRILC; the Vollrath index score of HS 3003 product group and the average stock returns of DEVA-ECILC-GENIL-TRILC; the Vollrath index score of HS 3004 product group and the average stock returns of DEVA-ECILC-GENIL-TRILC; the Vollrath index score of HS 3006 product group and the average stock returns of DEVA-ECILC-GENIL; the Vollrath index score of HS 3808 product group and the average stock returns of MEDTR and SEYKM; the Vollrath index score of HS 9019 product group and the average stock returns of ANGEN-MEDTR-RTALB; and finally, the Vollrath index score of HS 9020 product group and the average stock returns of ANGEN-MEDTR-SEYKM.