Examination of the Capital Structure Determinants of the Companies Traded in the Participation 30 Index by Panel Data Analysis

Abstract

Purpose – This study, it is aimed to determine the capital structure determinants of the 17 real sector companies operating in the Participation 30 Index and whose debt levels must be retained at a specific level in order to be included in the index in the period of 2011 and 2020. Design/methodology/approach – This study, determinants of capital structure were examined by panel data analysis method. Non-debt tax shield, size, operating leverage, liquidity ratio, return on assets and fluctuation in sales are included in the model as independent variables, while financial leverage ratio is included in the model as dependent variables. Findings – As a result of the analysis no statistically significant relation of the financial leverage to the non-debt tax shield and sales fluctuations was discovered. A statistically significant and positive relationship was found between the size, operating leverage, and financial leverage, while a statistically significant and negative relationship was found between the liquidity, return on assets and the financial leverage. Discussion – It can be said that the companies trading on the Participation 30 Index make capital structure decisions based on the agency cost, signaling, and the pecking order theories.