Firm Size and Capital Structure Decisions: Evidence From Turkish Lodging Companies

Abstract

Aim of this study is to investigate the role of firm size on capital structure decisions of Turkish lodging companies. In this context, a survey questionnaire is developed and sent to unquoted Turkish lodging companies. 163 lodging companies answered the survey and they are classified according to their sizes. Empirical findings reveal that firm size is a significant factor for capital structure decisions of Turkish lodging companies. Firm size seems to affect lodging companies in using incentives, issuing common stock, using personal debt and determining target debt ratio. Most of the empirical findings seem to support pecking order theory.

Keywords

• firm size
• capital structure
• pecking order theory
• trade-off theory
• lodging companies