Factors affecting leverage during a financial crisis: Evidence from Turkey

Johnny Jermias and Fatih Yigit

Borsa Istanbul Review, 2019, vol. 19, issue 2, 171-185

Abstract: The purpose of this study is to investigate the determinants of capital structure over time and the level of leverage before, during and after a financial crisis. Using a sample of publicly traded Turkish firms for the period of 1989–2012, we hypothesize and find that firm size and industry median leverage are positively and significantly associated with leverage while profitability and growth opportunities are negatively and significantly associated with leverage. Furthermore, we hypothesize and find that leverage levels are different before, during and after a financial crisis. The results are consistent using both static and dynamic models of leverage. The results suggest that managers need to adjust their leverage during and after a financial crisis to meet their need for debt and equity financing

Keywords: Leverage; FInancial crisis; Turkey; Fundamental factors (search for similar items in EconPapers)
JEL-codes: G31 G35 L2 (search for similar items in EconPapers)
Date: 2019
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.sciencedirect.com/science/article/pii/S2214845017300728#! (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bor:bistre:v:19:y:2019:i:2:p:171-185

Access Statistics for this article

More articles in Borsa Istanbul Review from Research and Business Development Department, Borsa Istanbul Contact information at EDIRC.
Bibliographic data for series maintained by Ahmet Palu ().