Paper Title
Analysis of the Capital Structure of Turkish Companies using Dynamic Panel Data

Abstract
Analysis of the Capital Structure of Turkish Companies using Dynamic Panel Data Capital structure decisions are vital for future earnings as well as bankruptcy risks. Traditional theories try to rationalize the behavior of managers when they obtain debt but static models seem to be inadequate as managers’ decisions are subject to change. This paper aims to analyze key ratios in explaining the change in Debt to Equity ratio which proxy for optimal leverage. With a static model, it is found that foreign obligations to debt ratio had a positive and significant effect on debt to equity ratio. However, when a dynamic model is used, the ratio loses its significance even the sign changes which lend credit to dynamic models. It is also found that Altman Z-score is negatively and significantly affecting D/E ratios in Turkish market. Similarly, Current ratio has positive and significant (99%) effect on D/E and net working capital to total assets, market to book value and constant have positive and significant impact (99%) on D/E ratio. This paper provides slight support for trade off theory in terms of liquidity effect on debt levels. For our sample period, collateral and growth have positive and significant impact on debt levels. Keywords - Capital Structure, Debt to Equity