The effects of firm specific and macro economic factors on capital structure decisions of the companies: An application on BIST

While creating capital structures of firms, company managers and shareholders follow certain strategies and make decisions. The basis of these strategies is the determination of the debt/equity mix that will increase the firm's value without increasing the risk level of the firm. The previous studies in the capital structure literature, in which the factors affecting the capital structure were tried to be determined, mainly focused on the factors specific to the firm and built on the related theories on these relationships. In this study, the effects of firm-specific factors as well as macroeconomic factors on capital structure were also investigated. In this thesis, firstly, capital structure theories described, and then related studies in Turkey and in the world were discussed. Within the scope of the study, financial table data of BIST Technology, BIST Industrial and BIST Services indices companies operating in Borsa Istanbul were collected. Then, these data were first analyzed using Static Panel Data and then Dynamic Panel Data methods. According to the findings, the capital structures of publicly traded firms in Turkey are affected by the following factors: firms' asset structure, profitability, size, risk level, tax payment level, non-debt tax shield, growth opportunities, liquidity and market interest rates, banking sector development level and global financial crisis. When statistically significant signs of these factors are compared with the expectations of capital structure theories, it has been found that firms operating publicly in Turkey follow predominantly the pecking-order theory in their capital structure behavior. These findings are consistent with many previous studies.