This study highlights the corporate governance potential of debt maturity structure for Turkish firms through investigating its association with ownership and control structure. We model leverage and debt maturity as jointly endogenous under simultaneous equations framework. Firstly, we find that both concentrated ownership structure and presence of a large shareholder is directly but moderately related to corporate debt maturity. We also document that it is important for Turkish firms to match maturity of their assets with maturity of their liabilities. Our findings lend considerable support to the prediction that as firms get financially strong or have more growth opportunities they shorten their corporate debt maturity structure. Moreover, despite having a controlling large shareholder or a concentrated ownership structure, firms with growth opportunities still prefer shorter maturities in order to solve the underinvestment problems. Finally, firm size is positively associated with long-term debt and our empirical analysis provides no evidence that taxes affect debt maturity structure. Copyright (c) 2006 The Authors; Journal compilation (c) 2006 Blackwell Publishing Ltd.

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We study the comparison of returns between value and growth, and between small and large capitalization portfolios for an emerging market, the Istanbul Stock Exchange (ISE). We show that growth portfolios have superior performance over value portfolios. Thus, our results do not confirm the evidence from most developed and emerging markets. Moreover, inconsistent with the evidence from developed markets, monthly and annually small-large portfolio spreads favour large stocks. These results reflect that the structure of the market and the fundamental of stocks traded in the ISE differ from markets around the world. Time series regression results show that the average returns on value and growth portfolios are not sensitive to market movements. Size and B/M risk factors along with market risk premium produce better descriptions of the returns on value and growth portfolios.

Abstract. The purpose of the paper is to identify common attributable factors causing credit risks to domestic and international SMEs of an emerging market in Turkey. We call domestic fi rms as the ones only making local sales and international fi rms as the ones also making sales abroad. Therefore in this study, cross-border sales are assumed to lead the fi rms to internationalization. We study totally 1,166 SMEs for the year 2007, which coincide with an economic expansion in Turkey. We fi nd that different factors affect credit risks for the two types of fi rms. For domestic fi rms, our results present a direct relationship between the likelihood of corporate default and trade credits, corporate tax, fi nancial expenses and net profi t margin yet the relationship turns negative for gross profi t margin. For international fi rms, likelihood of corporate default increases with the ratio of inventories to total assets but decreases with net profi ts and net sales.

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