The Effect of Capital Structure on Profitability: Evidence from the Turkish Manufacturing Companies

Abstract

Purpose: This study analyses the relationship between capital structure and profitability levels of manufacturing industry companies operating in Türkiye between the years 2006-2020. Methodology: The relationship between capital structure and the profitability of Turkish manufacturing industry companies was analyzed using the standard error estimator proposed by Driscoll and Kraay (1998). In this context, sub-panel data models were created. Findings: The findings showed that capital structure changes (short-term debt, long-term debt, and total debt) in the manufacturing industry are negatively related to both return on assets and return on equity. Originality: It is thought that this study will contribute to the existing literature in terms of better understanding the relationship between the changes in the capital structure decisions of the manufacturing industry companies operating in Türkiye, both their return on assets and their return on equity, taking into account their sub-sectors.

Keywords

• kârlılık
• aktif getirisi
• özkaynak getirisi
• sermaye yapısı
• borç
• i̇malat sanayi
• driscoll-kraay panel veri modeli
• profitability
• return on assets
• return on equity
• capital structure
• debt
• manufacturing industry
• driscoll-kraay panel data model