Determining the Firm Specific Factors Affecting the Capital Increase

İsmail Tuna () and Süleyman Serdar Karaca ()
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İsmail Tuna: Gaziosmanpasa University
Süleyman Serdar Karaca: Gaziosmanpaşa University

Business and Economics Research Journal, 2016, vol. 7, issue 1, 89-105

Abstract: 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 (search for similar items in EconPapers)
JEL-codes: C23 C58 G11 G17 G32 (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (1)

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