Determining the Firm Specific Factors Affecting the Capital Increase

Article Information
Journal: Business and Economics Research Journal
Title of Article: Determining the Firm Specific Factors Affecting the Capital Increase
Author(s): İsmail Tuna, Süleyman Serdar Karaca
Volume: 7
Number: 1
Year: 2016
Page: 89-105
ISSN: 1309-2448
DOI Number: 10.20409/berj.2016116806
The firms increase their capital on three ways; external sources (right), internal sources (bonus) and the use of both external and internal sources (right and bonus).The decision of capital increase causes “anomalies” referred as the state of alienation from the normality in capital markets. The aim of the study is to submit an emprical study about industrial corporations which exist within Borsa Istanbul (BIST) Industrial Index in order to determine the firm specific factors causing anomalies and affecting capital increase decisions. By using the financial ratios belonging to 126 firms that take part in industrial index between the years 2003-2013, three models have been established with 14 dependent variables and 3 qualitative dependent variables (no capital increase-capital increase through rights issues is present-capital increase through bonus issues is present, no capital increase-capital increase is present). These three built models have been tested through the panel logit method in binary choice model way. According to the analysis results, odds ratio has been used to construe the effect size. As a result of the study, it was determined that Paid Capital/Equity and Fixed Assets/Total Assets variables have a positive effect on capital increase decision and its procedure in all three models.
Keywords: Capital Increase, Right Issue, Bonus Issue, Panel Data Analysis
JEL Classification: G11, G17, G32, C23, C58 Full Text