The Firm Specific Capital Structure Determinants of Turkish Firms Listed in Istanbul Stock Exchange: A Structural Equation Approach

Authors : Ali Sait ALBAYRAK

Pages : 530-559

Doi:10.21733/ibad.609959

View : 47 | Download : 8

Publication Date : 2019-10-30

Article Type : Research Paper

Abstract :This study tests the explanatory power of the most important capital structure theories. The study extends empirical studies in three ways. First, it tests a much broader set of theories, many of which have not previously been evaluated empirically. Second, since the capital structure theories have different empirical implications in respect to different types of debt structures, this study analyzes measures of short-term, long-term and short-term with long-term debt structure rather than an aggregate measure of total debt structure. The empirical results show that liquidity, asset structure, size, profitability, growth and volatility are the statistically significant factors and tax level, non-debt tax shield are the insignificant factors in all models. Firm size and growth are positive; volatility and profitability are the factors that are effective in the negative direction in all models. However, liquidity and asset structure were found to affect short-term debt structure negatively, and long-term debt structure positively.
Keywords : Capital Structure, Trade off Theory, Pecking Order Theory, Structural Equation Modeling

ORIGINAL ARTICLE URL