مرکز منطقه ای اطلاع رساني علوم و فناوري - REVIEW OF RELATIONSHIP BETWEEN CAPITAL STRUCTURE AND FIRM VALUES IN DIFFERENT ASSET VALUES: AN APPLICATION ON ISE 100 FIRMS

Abstract :

This study focuses on whether there is a statistically significant relationship between leverage ratios and firm value and direction of the effect if there is an effect between these variables. In addition, to compare the mentioned relationship between different asset sized groups that are formed is another aim of the study. In this study, panel data analysis is performed by the data of 63 companies in the ISE-100 index between 2004 and 2009. The effects of capital structure ratios which are the independent variables of the analysis on the monthly returns of the stocks are studied. As a result, there is a statistically significant and negative relationship between the variables for the companies that’s average asset size is less than TL 500 million. However, the relationship between the variables cannot be explained statistically for the firms that’s average asset size is between TL 500 million and TL 2 billion and also for the firms that’s average asset size is more than TL 2 billion. The study results range from the theories which explain the irrelevancy of the capital structure and firm value. And also the results do not match with the theories that argue the positive relationship between leverage ratios and firm value.