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Firm, Country and Macroeconomic Determinants of Capital Structure: Evidence from Turkish Banking Sector

Emerging Markets Journal

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Title Firm, Country and Macroeconomic Determinants of Capital Structure: Evidence from Turkish Banking Sector
 
Creator Baltacı, Nuri
Ayaydın, Hasan
 
Subject —
 
Description This study explores the significance of firm-specific, country, and macroeconomic factors in explaining variation in leverage using a sample of banks from Turkish banking sector. The analysis is based on quarterly firm-level data from Turkish banking sector in 2002–2012. We aims to contribute to the empirical capital structure literature in the following ways. Our first contribution comes from assessing the importance of firm-specific factors, country-level factors and industrial factors for capital structure decisions in Turkish banking sector. Second, we employ appropriate and advanced dynamic panel data estimators, Blundell and Bond’s (1998) generalized methods of moment’s estimators (GMM System). We find that leverage is significantly and positively associated with average industry leverage, firm size and GDP growth. We find also that leverage is significantly and negatively associated with tangibility, profitability, inflation and financial risk. The regression results for leverage are both theoretically and empirically plausible for banks in Turkey. Moreover, tangibility, profitability and GDP growth are consistent with the predictions of the pecking order theory, while firm size is consistent with the predictions of the trade-off theory. Our findings suggest that the capital structures of financial and non-financial firms are ultimately determined by the same drivers.
 
Publisher University Library System, University of Pittsburgh
 
Contributor —
 
Date 2014-03-05
 
Type info:eu-repo/semantics/article
info:eu-repo/semantics/publishedVersion
Peer-reviewed Article
 
Format application/pdf
 
Identifier http://emaj.pitt.edu/ojs/index.php/emaj/article/view/46
10.5195/emaj.2014.46
 
Source EMAJ: Emerging Markets Journal; Vol 3, No 3 (2014); 47-58
2158-8708
 
Language eng
 
Relation http://emaj.pitt.edu/ojs/index.php/emaj/article/view/46/196