Capital Structure Decisions Under Micro Institutional Settings: The Case of Turkey

This article examines the impact of profitability, asset tangibility, size, and growth opportunities on capital structure decisions of Turkish industrial firms. I aim to show that corporate governance and equity ownership struc ture could influence the relationship between debt ratios and firms' charac teristics. Using regression analysis, I find that characteristics of firms along with equity ownership by managers, financial institutions, the government, and stock market activities determine the capital structure choice of Turkish firms in a way similar to other developed and developing countries. There is one exception, growth opportunities. Both total debt and long-term debt ratio increase with growth opportunities of firms.