Determinants of capital structure: evidence from Turkish lodging companies

Karadeniz, Erdinç; Kandir, Serkan Yılmaz; Balcılar, Mehmet; Önal, Yildirim

doi:10.1108/09596110910967827

Cited by 156 publications

(157 citation statements)

References 60 publications

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“…The aim is to optimize the firm value and minimalize the capital cost of firm. Study done by Karadeniz et al [20] show that here is a statistically significant relationship between firm size and capital structure. Furthermore, A high firm value shows the welfare of the firm owner.…”

Section: The Indirect Effect Of Firm Size On Firm Value With Capital mentioning

confidence: 99%

The Effect of Asset Structure and Firm Size on Firm Value with Capital Structure as Intervening Variable

Setiadharma¹,

Machali²

2017

J Bus Fin Aff

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Secondly, firm value is affected by firm size. According to Brealey and Myers, a big firm has wide-spread stock, but it will make the stock less controlled/dominated from a certain party. On the other hand, stocks owned by a small firm are only distributed in a small area. A big firm tends to take a risk in selling their stock to maintain the needs of sales growth. Total of assets owned by a firm indicates the firm size. The bigger the firm size, the easier it is to get internal or external source of funds, which will affect the firm value itself. Previous studies which investigate the effect of firm size on firm value shows different results. Mule et al. [5] show that corporate size has no statistically significant impact on firm market value. The study done by Berger and Patti shows that firm size affects positively on firm value [6].Thirdly, firm value is affected by capital structure. Funding plays an important role in a business. Setbacks are often caused by financial problems, which are caused by limited source of funds and rejection in applying a loan. Funding policy is an important matter that later will be used as indicator in determining the proportion between loan and equity. The first thing that has to be done by firm management is to increase firm value by carefully setting a capital structure. Before setting the capital structure, a firm has to understand fully the main components of capital structure. An optimum capital structure is the one which maximizes the stock price. Excessive loans may detain the firm development and make the share holder think twice before investing. A capital structure is a serious matter for a firm because the quality of capital structure may affect the firm's financial state and the firm value as well. Studies in testing the effect of capital structure on firm value have been done by Ogbulu and Emeni, Kausar et al. [7], Aggarwal and Padhan [8], Sumiati and Manihuruk [9], however, the results are inconsistent. Study done by Ogbulu and Emeni shows that long-term debt and equity as components of capital structure, LongKeywords: Asset structure; Firm size; Capital structure; Firm value IntroductionThe trending investments nowadays are in the form of land, building, and property. This results in the fast growing of property and real estate industry. Land's price which increases by 25% each year also contributes in the growing of the firm industry. The firm value in this sector increases significantly in the past 5 years, which make the capital gain has increased by 187% as well. This enhancement is also the result of the increase in investor (share holder) who invests their money in the capital market. Firm value is a measurement of the upcoming firm's management success and it is able to increase the credibility of the firm towards the shareholder. If the needs of shareholders are fulfilled, it will have a good impact on the firm value. Considering the purpose of increasing the firm value, the firm needs to be cautious in making decision and considers the impact to the stoc...

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Section: The Indirect Effect Of Firm Size On Firm Value With Capital mentioning

confidence: 99%

The Effect of Asset Structure and Firm Size on Firm Value with Capital Structure as Intervening Variable

Setiadharma¹,

Machali²

2017

J Bus Fin Aff

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“…Myers and Majluf (1984) and Myers (1984) assumed an issue of asymmetric information among the managers; who are inside the organization and the investors; who are outside the organization and they developed the Pecking Order Theory. Karadeniz et al (2009) reported negative relationships between leverage and several other variables such as tangibility of assets, effective tax rates and return on assets of Turkish lodging firms; while the tendency of growth, non-debt tax shields, free cash flows and firm size were not proven to be relevant to leverage.…”

Section: Literature Reviewmentioning

confidence: 99%

Determinants of Capital Structure: The Evidence from European Energy Companies

Berkman¹,

İskenderoğlu²,

Karadeniz³

et al. 2016

IJBA

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The main aims of this study are to determine the factors which affect capital structure of corporations operating in energy sector and to detect capital structure theories with which capital structure of energy sector companies would comply. In this context, a panel data analysis was performed on totally 79 European energy companies operated between the years 2009 -2012. According to results of the study; diminishing leverage rate caused by increased liquidity in European energy companies can be explained with the Pecking Order Theory, while escalating leverage rate caused by increased tangible fixed assets or equity turnover would be defined with the Trade-off Theory.

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“…Other researches have demonstrated the existence of negative impact of capital structure on firm performance such as Ebaid (2009) in listed Egyptian firms, Chakraborty (2010) in India, Karadeniz et al (2009) in Turkish lodging companies and Huang and Sang (2006) in China. Krishnan and Moyer (1997) found a negative and significant impact of total debt to total equity (TD/TE) on Return on Equity (ROE).…”

Section: The Pecking Order Theorymentioning

confidence: 99%

The Relationship between Capital Structure and Performance in Gulf Countries Banks: A Comparative Study between Islamic Banks and Conventional Banks

Meero¹

2015

IJEF

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This paper mainly has two objectives: the first one is to identify the similarity of capital structure between Islamic and Conventional banks; Second objective is to detect the relationship between capital structure variables and performance of Islamic and Conventional Banks in Gulf Countries (GC). This investigation has been performed on a sample of 16 GC Banks (8 Islamic Banks and 8 Conventional Banks) for the period 2005-2014. ROE (return on equity) and ROA (return of asset) have been used as performance measures. Total debt to total assets, Equity to total assets, Debt to equity ratios have been used as capital structure measures. Size of the bank has been considered as dependent variable to identify its relationship with bank performance. Data collected were analyzed by using SPSS software. The results of the research indicate a similarity of capital structure of Islamic banks and Conventional banks in Gulf Countries. ROA as performance measurement has a significant negative relationship with financial leverage and a positive relationship with equity to assets ratio. This relationship is identified at Islamic banks, Conventional banks and all the banks of the sample. Bank size has a positive relationship with ROA and ROE as performance measures in Islamic and Conventional banks.

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Determinants of capital structure: evidence from Turkish lodging companies

Cited by 156 publications

References 60 publications

The Effect of Asset Structure and Firm Size on Firm Value with Capital Structure as Intervening Variable

The Effect of Asset Structure and Firm Size on Firm Value with Capital Structure as Intervening Variable

Determinants of Capital Structure: The Evidence from European Energy Companies

The Relationship between Capital Structure and Performance in Gulf Countries Banks: A Comparative Study between Islamic Banks and Conventional Banks

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