Dynamic Capital Structure Decisions: Evidence from Firms in an Emerging Economy

THE TURKISH ECONOMY: THE REAL ECONOMY, CORPORATE GOVERNANCE, AND REFORM AND STABILIZATION POLICY, S. Altug and A. Filiztekin, eds., pp 149-171, RoutledgeCurzon Studies on Middle Eastern Economics, 2006

33 Pages Posted: 7 Dec 2009 Last revised: 16 Dec 2009

See all articles by Yilmaz Guney

Yilmaz Guney

University of Hull

Aydin Ozkan

Hull University Business School (HUBS)

Kursat Yalciner

Gazi University

Date Written: December 2, 2009

Abstract

This paper analyses the financing decisions of publicly traded companies in Turkey by estimating a dynamic capital structure model and using a panel of 227 industrial firms during the period 1990 to 2002. The approach adopted in this study allows for unobserved time-invariant firm heterogeneity and the endogeneity of regressors. We observe that growth opportunities, size, profitability and asset structure of firms exert an impact on financial decisions of firms. However, the results reported in this paper are not in line with the traditional view that there should be a positive relationship between leverage and firm size. Furthermore, the findings suggest that the dynamic nature of the capital structure decisions of firms should not be neglected.

Keywords: Turkey, size, growth opportunities, panel data, GMM

JEL Classification: G3, G32

Suggested Citation

Guney, Yilmaz and Ozkan, Aydin and Yalciner, Kursat, Dynamic Capital Structure Decisions: Evidence from Firms in an Emerging Economy (December 2, 2009). THE TURKISH ECONOMY: THE REAL ECONOMY, CORPORATE GOVERNANCE, AND REFORM AND STABILIZATION POLICY, S. Altug and A. Filiztekin, eds., pp 149-171, RoutledgeCurzon Studies on Middle Eastern Economics, 2006. Available at SSRN: https://ssrn.com/abstract=1517120

Yilmaz Guney (Contact Author)

University of Hull ( email )

Hull, HU6 7RX
United Kingdom

HOME PAGE: http://https://www.hull.ac.uk/faculties/fblp/hubs.aspx

Aydin Ozkan

Hull University Business School (HUBS) ( email )

Hull, HU6 7RX
United Kingdom

Kursat Yalciner

Gazi University ( email )

Teknikokullar Ankara, 06500
Turkey

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