Determinants of the capital structures of manifacturing sector companies in BIST

Numerous literature studies have been conducted on the factors affecting the capital structure. The subject of this thesis is also to reveal which factors affect the capital structure today. Most of the previous studies in the literature have addressed the firm-specific factors that affect the capital structure. In this study, which capital structure theory(s) followed by 60 manufacturing sector companies traded in Borsa Istanbul (BIST) in the period of 2011-2022, were examined by panel data analysis method, including macroeconomic factors as well as firm-specific factors, In the scope of the study, the total leverage ratio as the dependent variable and size, asset structure, profitability, liquidity, non-debt tax shield (NDTS), free float ratio, market value/book value (MV/BV), gross domestic product (GDP) growth rate and interest rate are used as the explanatory variables. As a result of the tests performed using static balanced panel data analysis, it was deemed appropriate to use the random effects model and Arellano, Froot & Roger Robust (Cluster) estimator. According to the results of the study, a positive and statistically significant relationship was found between the firm size, free float ratio variables and the leverage ratio in our established model. The firm size variable supports the trade-off theory. Free float ratio variable supports pecking order theory. A negative and statistically significant relationship was found between the profitability, liquidity ratio, GDP growth rate variables and the leverage ratio, and these relationships were found to be compatible with the pecking order theory. On the other hand, although there are positive relationships between asset structure, NDTS, MV/BV ratio, interest rate variables and leverage ratio, it was not statistically significant. The findings show that the manufacturing sector firms in the BIST generally act according to the pecking order theory when determining their capital structures. The results contribute significantly to the evaluation of firms in the manufacturing sector and show how managers can achieve an optimal capital structure, and are consistent with previous studies in literatüre.