# Overviewing the Capital Markets in Turkey

Capital construction is the mix of debt and equity used by a company which is financing their assets. The determination of capital construction is the 1 of the most important determinations which made by fiscal direction. The determination of the capital construction is on the center of other determinations which contains corporate finance. Harmonizing to these which include dividend policy, undertaking funding, issue of long-run securities, funding of amalgamations, buyouts. One of the most aims is that the corporate fiscal director warrant the lower cost of capital and hence maximize the wealth and wage of the many stockholders. The capital construction plays the of import function of direction to pull off and command the houses ‘ cost of capital. The best capital construction is to minimise the lowest cost of capital. To the general sense, refers to equity capital construction is the capital and the ratio between the capital debt, which reflects the market economic system the fiscal relationship between endeavors, that capital and recognition as a nexus, through the composing of investing and borrowing stockholders, creditors and operators of cheques and balances.

Harmonizing to the senior work of Modigliani and Miller ( 1958 ) on capital construction, three conflicting theories of capital construction have been found, which is inactive tradeoff, picking order, and bureau cost theories. The inactive tradeoff theory of capital construction ( besides referred to as the revenue enhancement based theory ) states that optimum capital construction is obtained where the advantage of net revenue enhancement debt funding balances leverage include costs such as fiscal recession and bankruptcy, keeping house ‘s assets and investing determinations constant ( e.g. , Baxter, 1967 and Altman 1984, 2002 ) . Harmonizing to this theory, describing equity means remaining off from the appropriate and that ought to so be considered bad intelligence. Harmonizing to Myers ( 1984 ) , houses following this theory could be regarded as puting a mark debt-to-value ratio with a gradual effort to accomplish it. Myers ( 1984 ) , while, advice that directors would be unwilling to publish equity whether they get to experience that is lower valued in the market. The consequence is that investors realize equity issues to merely go on whether equity is either reasonably priced or overpriced. Finally investors make the attending to respond negatively to an equity issue and direction is unwilling to publish equity.

Overview of This Survey

This paper investigates the relationship between capital construction and steadfast public presentation. The sample we choose is 345 listed-companies in turkey capital market. Non-parametric informations enclosure analysis ( DEA ) methods will be used by us, in order to through empirical observation build the industry ‘s ‘best pattern ‘ frontier and step house efficiency as the distance from that frontier. Whether more debt in house ‘s capital construction will assist the houses become more efficient, which is our primary aim.

The intent of this research is to through empirical observation analyze the relationship between a figure of possible capital construction, which is including some variables, such as liquidness, growing rate, profitableness and debt degree for Turkey corporations. Now our survey is merely analyzing the nexus between liquidness and purchase ratio of Turkey companies, besides the nexus between growing rate and purchase ratio, and the nexus between profitableness and purchase ratio of these Turkey houses.

Scott and Martin ( June 1975 ) and Mohammad ( middle of 1995 ) have discovered indispensable impact on purchase ratios. Choosing the sample of houses from some certain industry group, Scoot and Martin ( June 1975 ) examines the purchase ratios about 12 chief industries, while Schwartz and Amrizoni??beginning of 1967i?‰examined the purchase ratios on eight houses which conclude the four US industries like railwaies, electrics and gas. Specially, these surveies stated the different industries in steadfast purchase ratios. Mohammad ‘s ( middle of 1995 ) examined on the selected industrial houses on the chief board of the Turkey stock exchange besides find that there are meaningful inter-industry differences in capital construction to the Turkey big companies.

The Question Generated

Based on our surveies, there are three inquiries recorded by research workers that were associated with determiner of capital construction of Turkey industry corporations.

Our research inquiries are:

Is there any relationship between the growing rate and purchase ratio of Turkey companies?

Is there any relationship between the liquidness and the purchase ratio of Turkey companies?

Is there any relationship between the profitableness and purchase ratio of Turkey companies?

The Aims of Study

The aim of our research is as listed below:

Finding whether there is relationship between growing rate and purchase ratio of Turkey companies.

Finding whether there is relationship between the liquidness and the purchase ratio of Turkey companies.

Finding whether there is relationship between the profitableness and the purchase ratio of Turkey companies.

## Part II: Literature Reappraisal

For this point that is the literature reappraisal which propose the important empirical and theoretical information and information to analyze the capital construction of the Turkey industry companies and that is still used to be a foundation for the analysis of the findings.

Empirical Literatures

An estimation of a house ‘s production efficiency was used in this article to measure how of import the purchase performs within a house. More specifically, the direct consequence of purchase on house public presentation is the first thing we should gauge as stipulated by the Jensen and Meckling ( 1976 ) purchase theoretical account. Second, we investigate if there is an consequence on house ‘s efficiency on capital construction and if this consequence is similar or non across to different capital construction picks. By these analyses we will see explicitly the function of liquidness, profitableness and growing rate on the capital construction of these Turkey companies.

The first research paper on capital construction was written by Miller and Modigliani in 1958. They sufficient proved that the house ‘s value is non dependent on the capital construction thought was given conditions that are certain met. Due to the unrealistic premises in MM theory, research on capital construction brought other theories. The trade off theory said that accommodation of a house which toward the best purchase is affected by three factors which is revenue enhancements, costs of fiscal hurt and bureau costs. Baxter ( 1967 ) stated that the widely usage of debt would better the opportunities of bankruptcy in regard that creditors demand extra hazard premium. He said that houses could non utilize debt at the side of the point where the debt cost becomes bigger than the advantage of revenue enhancement. Kraus and Litzenberger ( 1973 ) argument that if a company ‘s debt duties are larger than its net incomes therefore the company ‘s market value is basically a concave map of its liability duties. DeAngelo and Masulis ( 1980 ) worked further on Miller ‘s differential revenue enhancement theoretical account by including other non-debt shields such as depreciation charges and investing revenue enhancement credits. They are seting frontward that each house has an internal best capital construction that expanded its value. The capital construction is provided merely by the interactions of personal and corporate revenue enhancements every bit good as positive unwilling costs. Consequently, Altman ( 1984 ) was the first to place direct and indirect costs of bankruptcy. By analyzing 12 retail and 7 industrial companies, he found that houses in the sample faced 12.2 % of indirect bankruptcy costs at clip t-1 and 16.7 % at clip t. He makes the decision that capital construction should be such that the present value of fringy revenue enhancement benefits is equal to marginal present value of bankruptcy costs. Bradley, Jarrell and Kim ( 1984 ) used a theoretical account that combined the modern equilibrating theory of the best capital construction. They found the relationship of strong direct between non-tax shields and the house ‘s debt degree.

The capital construction pick is more complex while that is tested in an international reappraisal, particularly in developing states such as China, India, and Malaysia. In these states where markets are characterized by controls the tethers. Since the anterior research workers whose name is Miller and Modigliani ( 1958 ) , together research has been devoted to undertaking of happening a connexion for those effects the capital construction determination. General corporate fiscal theoretical accounts propose that companies need to take best capital constructions which is by the trading off assorted revenue enhancement and incentive net incomes of liability funding against fiscal luckless cost. However here is support for those trade trade-off theoretical accounts in this empirical literature, the remainder of surveies imply that a company ‘s capital determinations which are influenced by most of houses related some features for illustration, future growing options, net incomes volatility, profitableness and control. ( Titman & A ; Wessels, 1988 ; Glen & A ; Pinto, 1994 ) . The research such as Jensen and Meckling ( get downing of 1976 ) ; Williamson ( terminal of 1988 ) ; Harris and Raviv ( first season of 1990 ) ; Rajan and Zingales ( 1995 ) have stated factors which influence capital construction from the position of asymmetric information and bureau theory. While, harmonizing to the international information, state ordinances, type and the size of the industry and hang the authorities controls play an of import function in finding the capital construction.

Hypothesis

Based on our research aim there is two hypotheses about the determiners of capital construction in Turkey corporations. First hypothesis is the growing rate of Turkey corporations. Second hypothesis is the liquidness of Turkey corporations. The 3rd hypothesis is the profitableness of Turkey corporations. These hypotheses are examined to cognize whether growing rate, profitableness and liquidness are relevant in Turkey corporations. In other words it is merely tested is it a relationship between the growing rate, profitableness, liquidness and purchase ratio. These hypotheses are constructed in footings of alternate hypothesis ( H1 ) and void hypothesis ( H0 ) . To reject or accept the void hypothesis that is based on the consequences of the research.

H0 ( 1 ) : there is no any relationship between the liquidness and purchase ratio

H1 ( 1 ) : there is the relationship between the liquidness and purchase ratio

H0 ( 2 ) : there is no any relationship between the growing rate and purchase ratio

H1 ( 2 ) : there is the relationship between the growing rate and purchase ratio

H0 ( 3 ) : there is no any relationship between the profitableness and purchase ratio

H1 ( 3 ) : there is the relationship between the profitableness and purchase ratio

## Part III: Research Methodology

Sample of Companies

The analysis of purchase ratio for 100 Turkey companies on listed in Turkey chief board and the information was retrieved from Data Screen. The sample included the industrial sector harmonizing to the categorization of stock exchange board. The all industrial sector available on Data Screen will take under consideration. However, the concluding sample of this survey was 200 companies for five old ages from the period 2005 until 2009. The research worker would choose the company as sample after screen the available informations during the five old ages period. The dislocation of the sample into each industry is shown in table 1.

Table 1

1

ACIBADEM SAGLIK HZM.VTC.

Healthcare Suppliers

2

ADANA CIMENTO ‘B ‘

Building Mat. & A ; Fix.

3

ADANA CIMENTO ‘C ‘

Building Mat. & A ; Fix.

4

ADANA CIMENTO SANAYI ‘A ‘

Building Mat. & A ; Fix.

5

ADEL KALEMCILIK TIVSNY.

Nondur.Household Prod

6

ADVANSA SASA PLYSR.SYI. SANAYI

Clothing & A ; Accessory

7

AFM ULUSLARARASI FILM PRODUKSIYON

Recreational Servicess

8

AFYON CIMENTO

Building Mat. & A ; Fix.

9

AK B TIPI YTM.ORTAKLIGI

Investing Companies

10

AKAL TEKSTIL SANAYI

Clothing & A ; Accessory

11

AKBANK

Banks

12

AKCANSA CIMENTO SANVETC.

Building Mat. & A ; Fix.

13

AKENERJI ELEKTRIK URETIM

Con. Electricity

14

AKFEN HOLDING

Fiscal Admin.

15

AKIN TEKSTIL

Clothing & A ; Accessory

17

AKSA AKRILIK KIMYA SYI.

Forte Chemicals

18

AKSA ENERJI URETIM

Dur. Household Prod.

19

AKSIGORTA

Prop. & A ; Casualty Ins.

20

AKSU ENERJI VE TICARET

Alt. Electricity

21

ALARKO CARRIER SANVETC.

Industrial Machinery

22

ALARKO GAYMEN.YATOTA.

Diversified REITs

23

ALARKO HOLDING

Heavy Construction

24

ALBARAKA TURK

Banks

25

ALCATEL LUCENT TLT.TKS.

Telecom. Equipment

26

ALKIM ALKALI KIMYA

Commodity Chemicals

27

ALKIM KAGIT

Paper

28

ALTERNATIF YATOTA.

Asset Directors

29

ALTERNATIFBANK

Banks

30

ALTIN YAG KOMBINALARI

Food Merchandises

31

ALTINYILDIZ MENSUCAT VE KNFSN.FAB.

Clothing & A ; Accessory

32

ANADOLU ANONIM TURK SIGORTA SIRKETI

Prop. & A ; Casualty Ins.

33

ANADOLU CAM SANAYII

Containers & A ; Package

34

ANADOLU EFES BIRACILIK

Brewers

35

ANADOLU HAYAT EMEKLILIK

Life Insurance

36

ANADOLU ISUZU OMV.

Comm. Vehicles, Trucks

37

ANEL ELKTRIK PROJE TAAHHUT VE TIC.

Investing Servicess

38

ANEL TKS.ELNK.SIST. SANYI VE TICARET

Computer Services

39

ARAT TEKSTIL SUSP – 04/06/07

Furnishings

40

ARCELIK

Dur. Household Prod.

41

ARENA BILGISAYAR

Computer Hardware

42

ARMADA BLGSI.SANVETC.

Computer Hardware

43

ARSAN TEKSTIL

Clothing & A ; Accessory

44

ASELSAN ELNK.SANVETC.

Telecom. Equipment

45

ASLAN CIMENTO ANONIM SIRKETI

Building Mat. & A ; Fix.

46

ASYA KATILIM BANKASI

Banks

47

ATA YATARIM ORT

Investing Servicess

48

ATAKULE GAYMEN.YATOTA.

Diversified REITs

49

ATLANTIS YATIRM ORT

Investing Companies

50

ATLAS YATIRIM ORT

Asset Directors

51

AVIVA SIGORTA

Prop. & A ; Casualty Ins.

52

AVRASYA MENKUL

Investing Servicess

53

AYEN ENERJI

Alt. Electricity

54

AYGAZ

Gas Distribution

55

BAGFAS BANDIRMA GUBRE

Forte Chemicals

56

BAK AMBALAJ SANVETC.

Containers & A ; Package

57

BANVIT

Food Merchandises

58

BASKENT MENKUL KIY. YATOTA.

Investing Companies

59

BATI SOKE CIMENTO SYI.

Building Mat. & A ; Fix.

60

BATICIM BATI ADCT.SYI.

Building Mat. & A ; Fix.

61

BAYINDIR MADENCILIK VTC.

Clothing & A ; Accessory

62

BERDAN TEKSTIL SANVETC.

Clothing & A ; Accessory

63

BESIKTAS FUTBOL

Recreational Servicess

64

BIM BIRLESIK MAGAZALAR

Food Retail, Wholesale

65

BIRKO BIRLESIK KYLUL. MENSUCAT TICARET VE

Clothing & A ; Accessory

66

BIRLIK MENSUCAT

Clothing & A ; Accessory

67

BISAS TEKSTIL SANVETC.

Clothing & A ; Accessory

68

BOLU CIMENTO SANAYI

Building Mat. & A ; Fix.

69

BORAVA YAPI ENDUSTRI

Heavy Construction

70

BORUSAN MANNESMAN BORU

Industrial Machinery

71

BORUSAN YATIRIM VE PAZ.

Iron & A ; Steel

72

BOSCH FREN SIST.SANVETC.

Car Partss

73

BOSSA TIVSNY.ISTML.

Clothing & A ; Accessory

74

BOYNER BUYUK MAGAZACILIK

Broadline Retailers

75

BRISA BDGSN.SLK.SANVETC.

Tires

76

BSH EV ALETLERI SANVETC.

Dur. Household Prod.

77

BUMERANG YAT ORT

Investing Companies

78

BURCELIK BURSA CK.DOKUM

Industrial Machinery

79

BURCELIK VANA SANAYII

Industrial Machinery

80

BURSA CIMENTO FABK.

Building Mat. & A ; Fix.

81

CARREFOURSA CFR.SABANCI

Food Retail, Wholesale

82

CARREFOURSA GRUBU ‘B ‘

Food Retail, Wholesale

83

CBS BOYA KIMYA SYI.VE

Building Mat. & A ; Fix.

84

CBS PIT.OTO BOYA VE GRL. SANAYII

Forte Chemicals

85

CELEBI HAVA SERVISI

Conveyance Servicess

86

CELIK HALAT VE TEL SYI.

Iron & A ; Steel

87

CEMAS DOKUM SANAYI

Iron & A ; Steel

88

CEMTAS CK.MAKINA SANVETC

Iron & A ; Steel

89

CESME ALTINYUNOS

Hotels

90

CEYLAN GIYAM SANVETC.

Clothing & A ; Accessory

91

CIMBETON

Building Mat. & A ; Fix.

92

CIMENTAS IZMIR CET.FABK.

Building Mat. & A ; Fix.

93

CIMSA CIMENTO SANVETC.

Building Mat. & A ; Fix.

94

COCA COLA ICECEK

Soft Drinks

95

CMPDKLK.TIVSNY.

Car Partss

96

CREDITWEST FACG.HZM.

Forte Finance

97

DARDANEL

Food Merchandises

98

DATAGATE BILGISAYAR

Computer Hardware

99

DEMISAS

Industrial Machinery

100

DENIZBANK

Banks

Dependent Variable

## Leverage Ratio

In this survey, purchase ratio is dependent variable and the computation purchase ( LEV ) of house ratio of entire liabilities to entire assets ( Leverage ratio = entire debt / entire assets ) . Leverage could be predict by picking order theory like debt will increase when investing more than retained net incomes, meanwhile ; debt will diminish when investing is less than retained net incomes. In the determination of the Fama and French ( 2002 ) was suggested that more profitable houses are less levered and it consistent with the picking order but the houses with greater investing chances are less levered as predicted by the trade off theory.

## Leverage ratio = entire debt / entire assets

Independent Variables

The dependent variables were used to happen out determiners for capital construction and this survey merely concentrate on the growing rate and liquidness.

## Growth rate

The growing rate shows a important development in a company operation and concern project. Manager needs to set attempt in research and development to prolong growing and compatibility earlier make determination. In add-on, these enlargements demands immense sum of support from internally generated financess and externally raised financess. Therefore, it is expected that there is a positive association between growing and issue of new debt funding. Some empirical trial was find the relationship between growing rate and purchase ratio such as Timan and Wessels ( 1988 ) and Rajan and Zingales ( 1995 ) was found out that there is negative relationship between growing rate and purchase.

## Growth rate= intangible assets/ entire plus

## Liquid

Liquidity mean the ability of the company to run into short term duties through utilize their assets which can change over to hard currency in short-run period. This ratio besides explained that the ability of company by utilizing current assets to back up its current liabilities. Base on old survey, Sibilkov ( 2007 ) was stated that assets liquidness has positive relationship with company ‘s purchase. Besides, the relationship between assets liquidness and secured debt is positive, whereas the relationship between assets liquidness and unbarred debt is curvilineal. The liquidness would obtain as below expression:

## Current ratio = current assets / current liabilities

## Profitableness

Profitability ( PR ) is measured by the ratio of net incomes ( EBIT ) to entire assets. In general we expect a positive consequence of ( past ) profitableness on efficiency. More profitable houses are by and large better managed and therefore are expected to be more efficient. The expression for profitableness is:

## Net income Ratio=EBIT/ Total Assetss

Methodology of Study

The informations used in this survey is a secondary information which retrieved from Data Stream. The research worker would necessitate the company information is balance sheet and income statements. The informations selected from the income statements contained with net income and net gross revenues, the entire assets, entire debt, stockholder ‘s equity, entire plus, entire current liability and payout ratio. Data would change over into ratios in regard to growing and liquidness for step the purchase ratio. The statistical analysis of the informations would utilize multiple arrested developments techniques which measures the association of the different variables with the purchase ratio.

Besides, descriptive analysis would find the Numberss of topics, lower limit and upper limit mark, mean and standard divergence were computed to both variables. In Pearson correlativity analysis, a Pearson correlativity coefficient would depict the relation between dependant and independent variables. The multiple arrested development analysis would used to analyze how much the discrepancy in the dependant variable is explained by a set of forecasters. The arrested development theoretical account to be estimated is:

## Y = I?0+I?1 GR +I?2 LG + I?3 PRO+ Iµit

Yttrium: Leverage ratio

GR: Growth rate

LG: Liquid

Professionals: Profitableness

I?0: The changeless term of the arrested development equation

I?1, I?2 and I?3 are the inclines that show the sensitiveness of the purchase ratio to growing and liquidness severally.

Iµit is the random mistake term which is the portion of the dependant variable that changes indiscriminately in consequence of other possible factors non included in this survey.

The intent of the analysis is to prove which independent variables is extremely important to find the company ‘s purchase ratio. Last, arrested development ANOVA and R-square were used to prove the significance of the void hypothesis

## Part IV: RESULT AND FINDING OF RESEARCH

Descriptive Statisticss

## Table 2: Summary of Descriptive Statistics

Nitrogen

Scope

Minimum

Maximum

Mean

Std. Deviation

Discrepancy

lev

78

2.9267

.0000

2.9267

.264077

.4319237

.187

liquidness

78

7.0344

-.5748

6.4595

.212674

.7368363

.543

growing

78

.3548

.6452

1.0000

.957430

.0769252

.006

profitableness

77

1.9151

-.3455

1.5696

.093855

.2021422

.041

Valid N ( listwise )

77

The houses represent the industrial sector of Turkey and the information was contained 100 companies which listed in Turkey Main board from 2001 to 2009. The undermentioned tabular array would demo the drumhead statistics for the variables used in our analysis. Descriptive statistics contains the mean, average, and standard divergence from twelvemonth 2005 to 2009. Table 2 was explained that the Turkey industrial companies have mean for growing rate is 0.264077 and liquidness is 0.212674 and profitableness is 0.093855. The difference between growing and liquidness is 0.05135 which mean liquidness higher a spot than growing rate. The difference between growing and profitableness is 0.10435 which average growing is much higher than profitableness. The maximal and minimal rate for liquidness is -0.5748 and 6.4569, the growing rate is 0.6452 and 1.0000, and the profitableness is -0.3455 and 1.5696.

Correlation among Variables

## Table 3: Pearson correlativity matrix of variables

Leverage

Growth

Liquid

Profitableness

Leverage

1A

-0.085

0.054

0.000

Growth

-0.085

A 1

-0.034

-0.060

Liquid

0.054

-0.034

A 1

0.015

Profitableness

0.000

-0.060

0.015

1

** Correlation is important at the 0.01 degree ( 2-tailed ) .

The tabular array 3 demonstrates the Pearson correlativity Matrix. The dependent variable purchase ratio is significantly and positive correlated with growing, 0.054. Meanwhile, purchase is significantly and positive correlated with liquidness, 0.054, and at last, purchase is significantly correlated with profitableness, 0.000.

Test the Hypothesis

## Table 4: Summary of Correlations

lev

liquidness

growing

profitableness

lev

Pearson Correlation

1

.054

-.085

.443 ( ** )

Sig. ( 2-tailed )

.641

.461

.000

Nitrogen

78

78

78

77

liquidness

Pearson Correlation

.054

1

-.034

.015

Sig. ( 2-tailed )

.000

.766

.899

Nitrogen

78

78

78

77

growing

Pearson Correlation

-.085

-.034

1

-.060

Sig. ( 2-tailed )

.461

.766

.602

Nitrogen

78

78

78

77

profitableness

Pearson Correlation

.443 ( ** )

.015

-.060

1

Sig. ( 2-tailed )

.000

.899

.602

Nitrogen

77

77

77

77

** Correlation is important at the 0.01 degree ( 2-tailed ) .

## Hypothesis 1:

## Table 5: Correlation between Liquidity and purchase ratio

Pearson Correlation ( R )

important

Liquid

0.054

0.000

Table 5 demonstrates that there is a important positive correlativity between liquidness and company purchase with a important value of 0.000. So The void hypothesis H02 will be rejected by us, and at the same clip, the hypothesis H01 will be accepted. On other words, liquidness and company ‘ purchase is significantly related with a weak relationship ( r=-0.054 )

## Hypothesis 2:

## Table 6: Correlation between growing and purchase ratio

Pearson Correlation ( R )

important

Growth

-0.085

0.461

Pearson correlativity trial was determined the consequence of two interval variable. Table 6 shows that there is non important between company purchase and growing with 0.461. So, the void hypothesis H2 ( 0 ) will be accepted and the alternate hypothesis H2 ( 1 ) will be rejected. Wholly, there is no any relationship between the growing rate and purchase ratio with a correlativity of -0.085.

## Hypothesis 3:

## Table 7: Correlation between growing and purchase ratio

Pearson Correlation ( R )

important

Profitableness

0.443

0.000

This tabular array 6 shows that the purchase and profitableness is positive and significantly correlated between each other with 0.000. So, the hypothesis H3 ( 1 ) will be accepted and the void hypothesis H3 ( 0 ) will be rejected. Wholly, there is a important and positive relationship between the growing rate and purchase ratio with a correlativity of 0.443.

## Table 8: Model Summary of arrested development

Model

Roentgen

R Square

Adjusted R Square

Std. Mistake of the Estimate

Change Statisticss

R Square Change

F Change

df1

df2

1

.449 ( a )

.202

.169

.3954252

.202

6.142

3

73

a Forecasters: ( Constant ) , profitableness, liquidness, growing

B Dependent Variable: lev

## Table 9: ANOVA ( B )

Model

Sum of Squares

df

Mean Square

F

Sig.

1

Arrested development

2.881

3

.960

6.142

.001 ( a )

Residual

11.414

73

.156

Entire

14.295

76

a Forecasters: ( Constant ) , profitableness, liquidness, growing

B Dependent Variable: lev

## Table 10: Coefficients ( a )

Model

Unstandardized Coefficients

Standardized Coefficients

T

Sig.

95 % Confidence Interval for B

Bacillus

Std. Mistake

Beta

Lower Boundary

1

( Constant )

.454

.567

.801

.426

-.676

liquidness

.029

.061

.050

.478

.634

-.093

growing

-.294

.588

-.052

-.499

.619

-1.466

profitableness

.942

.225

.439

4.189

.000

.494

a Dependent Variable: lev

Table 7 shows that the R value is 0.443, which is the correlativity of the two independent variables with the dependant variable. After that, the R square value was 0.1649. This can be explained by discrepancy and is really the square of the multiple R ( 0.443 ) A? . It means that merely 16.49 % per centum of three variables can impact the dependant variable.

The ANOVA tabular array shows that the F value of 6.142 is important at the 0.000 degree. This average 0.1649 of the discrepancy ( R-square ) in company ‘s purchase has been to the full explained by the three independent variables. The coefficient can assist us to see which variable is of import in explicating the discrepancy in the company ‘s purchase. If we look at the column Beta under Standardized coefficient, we will see the highest figure in beta is liquidness which is important at the degree 0.000 but its shows that the growing rate is non important. The undermentioned multiple arrested development equation can be obtain from the SPSS end product:

## Leverage = 0.4554+0.029 liquidness -0.294 growth+0.942profitability + Iµ

## Part V: Decision

This mini research figures out the relationship between the dependant variable, which is purchase, and independent variables, which are liquidness, growing, and profitableness. We conducted this analysis by utilizing the directional distance map to organize the theoretical account.

By utilizing SPSS, the purchase has no important relationship with growing. In Turkey, as we know, the directors would prefer to publish new debt to raise financess because of the higher growing rate connote a higher demand for financess. Harmonizing to the survey of Jensen and Meckling ( 1976 ) , the grounds from picking order theoretical account suggests that the deficiency of internal financess is the most of import determiner that perchance explains the issue of new debt in capital market despite the lower foretelling power.

Other than this, they besides confirm the fact that Turkey houses do non worry about tax-shield benefit derive from employ both debt and non-debt tax-shield. Liquidity is important and positively correlated to the purchase ratio. The director would publish equity than debt if their liquidness is high to raise their fund which found out by Lipson and Mortal ( 2006 ) . They besides stated that they do non account for the consequence that purchase has on liquidness.

The determination of survey is that the better apprehension of funding behaviour in Turkey companies. Leverage ratio and three variables which are growing, liquidness and profitableness to prove which capital construction factors have much consequence on Turkey companies ‘ capital construction. Furthermore, the determination expected can lend to assorted parties and assist them in financing decision-making. Finally, the hereafter research worker should take more variables such company size and profitableness, distinguishing between long and short term debts into consideration, included more samples and longer period observation.