Determining The Factors Affecting Capital Structure Decision of Real Sector Companies Operating in ISE

Abstract

Determining The Factors Affecting Capital Structure Decisions of Real Sector Companies Operating in Borsa Istanbul

Corporate capital structure remains a controversial issue in modern corporate finance. Since the seminal work by Modigliani and Miller (1958), an excessive amount of research has been undertaken to identify the determinants of capital structure.

This paper analyzes the explanatory power of the determinants that have been proposed in the literature to explain firm specific determinants of the corporate capital structure. This study applies panel data regression based on data set of four consecutive years from 2010 to 2013 comprising of 230 companies. In particularly, the companies will be seperated into three subsectors namely manufacturing, merchandising and service sector, to test the variations in independent variables. This work contributes to the existing body of literature in the way that the subsector determinants of capital strucuture will be revealed in the stock market of Turkey as an emerging economy.