Factors Affecting the Financial Leverage of Service Firms in Turkey: An Empirical Investigation

Abstract

This research investigates the factors affecting the financial leverage of 52 service firms listed on Istanbul Stock Exchange during the period from 2008 to 2017. Using Ordinary Least Squares (OLS) regressions, our results indicated that, as assumed by the pecking order model, leverage increases with investment opportunities and decreases with profitability, liquidity and tangibility. Furthermore, we find that larger firms tend to have high leverage. However, contradicting the trade-off model, non-debt tax shields are positively and significantly related to leverage.

Keywords

• kaldıraç
• dengeleme modeli
• finansal hiyerarşi modeli
• hizmet firmaları
• borsa i̇stanbul (bi̇st)
• leverage
• trade-off model
• pecking order model
• service firms
• istanbul stock exchange.