Analyzing of the validity of structure theories: An application on the BIST sustainability index

One of the most researched topics in the financial literature is the factors affecting the capital structure of the enterprises and their relations with the capital structure. With the removal of the limits of the financial system in the globalized world; companies must be more careful and meticulous. In particular, it is of great importance that companies provide the appropriate capital component. In this study, it is tried to be validated the Finance Hierarchy Theory and Balancing Theory by using quarterly data of the 18 firms within the scope of the analysis which is traded in the BIST sustainability index. According to the results of the panel data analysis; When the coefficients of the variables are examined, there is a negative relationship between company profitability, asset structure and non-debt tax shield independent variables and capital structure dependent variable. On the other hand, there is a positive relationship between growth opportunities and firm size independent variables and capital structure. While profitability and size variables were statistically significant, other variables were not statistically significant. While profitability from meaningful variables supports the Financing Hierarchy Theory, size supports the Balancing Theory. Therefore, we can say that these 18 firms' debt usage preferences are explained by both the Financing Hierarchy Theory and Balancing Theory. Key Words: Sustainability, Capital structure theories, Panel data analysis, Leverage