Determinants of Capital Structure: The Case of Turkish Hotels from Tourism Industry

The aim of this study is to determine, investigate and describe the determinants of capital structure in the five major hotels, acting in the Tourism Industry of Turkey, over the period of 1998-2010. Different capital structure theories were probed with a view to establishing valid propositions concerning the determinants of capital structure of Turkish Hotels. The results have shown that size of the hotels, tangibility of their assets, risk level and non-debt tax shields can be considered as the major determinants of capital structure of hotels in Turkey. We found that the Trade-off theory seems to explain the choice of capital structure more appropriately, compared to other theories. Keywords: capital structure, determinants of capital structure, trade-off theory.