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BUSINESS AND ECONOMICS RESEARCH JOURNAL

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Article Information
Journal: Business and Economics Research Journal
Title of Article: Pecking Order Theory in Determining The Capital Structure: A Panel Data Analysis Of Companies in Turkey
Author(s): Sefika Nilay Onatca Engin, Cansu Unver Erbas, Ahmet Gokhan Sokmen
Volume: 10
Number: 3(Special Issue)
Year: 2019
Page: 687-698
ISSN: 2619-9491
DOI Number: 10.20409/berj.2019.193
Abstract
Capital structure decisions are an important issue that should be emphasized in order to enable enterprises to continue their activities and grow in a healthy manner. The purpose of this study is determining the capital structure and evaluating which capital structure theory fits the firms’ attitude. Knowing the characteristics of the determinants of capital structure and how they affect the capital structure will enable capital structure decisions to be taken more effectively. For this purpose, panel data analysis was carried out by using the balance sheets and income statements data of 186 manufacturing companies, whose shares are traded in İstanbul Stock Exchange between the years 2009-2016. The results of the analysis indicate that firms firstly use internal funds. External funds are used only when internal funds are insufficient. The results of the analysis show that these firms’ attitudes are fit with the pecking order theory.

Keywords: Capital structure, Pecking Order Theory, Target Debt Ratio, Panel Data Analysis, Manufacturing Companies

JEL Classification: C23, G32

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