THE GLOBAL FINANCIAL CRISIS AND CAPITAL STRUCTURE DECISIONS OF TURKISH SMEs: A REVIEW

Tekin, Hasan; Polat, Ali Yavuz

doi:10.17130/ijmeb.798509

Cited by 5 publications

(2 citation statements)

References 101 publications

(160 reference statements)

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“…While the capital structure of Turkish firms has been studied extensively (e.g., Karasahin & Kucuksarac, 2016;Tekin & Polat, 2020), most studies have focused on the effects of either macro or microlevel variables. Despite the growing importance of cross-cultural diversity in the boardrooms of Turkish firms, there is a lack of empirical research on how this diversity affects the firms' borrowing decisions.…”

Section: Introductionmentioning

confidence: 99%

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The Cultural Diversity of the Board of Directors and Capital Structure

Karakoç¹,

Arcagök²

2023

berj

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Cultural characteristics and personal values can play a significant role in financial decision-making process, alongside economic factors. This study contributes to the existing literature by investigating the impact of cross-cultural board members on capital structure decisions in publicly traded firms in Turkey. Using panel data methodology to analyze the capital structures of these firms between 2011 and 2020, we found that firms with at least 30% cross-cultural representation on their boards tend to borrow more than firms with less diverse boards. Similarly, firms with at least one cross-cultural board member borrow more than firms managed entirely by locals. These findings are significant in contributing to the understanding of the role of cultural diversity in financial decision-making and offer practical implications for firms aiming to optimize their capital structures. The results remain robust even after alternative regression specifications and other corporate financing decisions have been considered.

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Section: Introductionmentioning

confidence: 99%

“…For example, large firms, which are less likely to suffer from information asymmetry (Chae, 2005), can borrow more. Moreover, existing liquid assets and internal revenues reduce the need for borrowing (Tekin & Polat, 2020) and hence are likely to be negatively correlated with leverage.…”

Section: Introductionmentioning

confidence: 99%

The Cultural Diversity of the Board of Directors and Capital Structure

Karakoç¹,

Arcagök²

2023

berj

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How Do Geopolitical Risk and Global Trade Shape Corporate Cash Policy?

Tekin

GÜRBÜZ

Kayadibi

2022

The Transformation of Global Trade in a New World

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This chapter investigates the influence of geopolitical risk (GPR) and global trade on cash holdings with the existence of the global financial crisis 2008-2009 (GFC) for 11,960 non-financial firms in 18 markets from 2002 to 2017. Findings show that firms in countries with higher GPR and lower trade volume have higher cash balances confirming the predictions of the precautionary motive of cash. The implications of the findings are manifold. Managers should shape their cash policies considering the uncertainties, GPR, and trade level. Investors should consider countries' financial crises and GPR in specifying where and which firms to invest in. Policymakers can reshape the regulations and policies related to holding cash rather than paying dividends not to hurt firms in times of turbulence like the pandemic. Researchers and practitioners should count the macro-specific factors and market turmoil and their influence on cash holding in risky countries. The implications are particularly relevant to the post-pandemic era when exogenous shocks and uncertainties are further expected.

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Rule of Law, International Trade, and Corporate Financing Decisions in Europe

Polat

2022

The Transformation of Global Trade in a New World

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This chapter investigates whether the institutional environment that the firms operate has an impact on their leverage choice. Namely, rule of law is used as an institutional variable. Considering that better implementation of rule of law impacts positively firms' export performance, total exports in each country are also used as the other main explanatory variable. The findings show that both institutional variables and exports negatively and significantly affect the leverage level. This implies that firms in favorable institutional environment tend to borrow less, which results with lower leverage. Moreover, this study finds that the COVID-19 pandemic period as an unprecedented shock to economies pushed the leverage levels higher. Regarding the implications of the findings, firms' capacity to access external finance especially during a significant crisis period depends on the institutional environment. Namely, the effective implementation of rule of law should be first priority for the policy makers.

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THE GLOBAL FINANCIAL CRISIS AND CAPITAL STRUCTURE DECISIONS OF TURKISH SMEs: A REVIEW

Cited by 5 publications

References 101 publications

The Cultural Diversity of the Board of Directors and Capital Structure

The Cultural Diversity of the Board of Directors and Capital Structure

How Do Geopolitical Risk and Global Trade Shape Corporate Cash Policy?

Rule of Law, International Trade, and Corporate Financing Decisions in Europe

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