WHAT A HARD DECISION: CAPITAL STRUCTURE OF REITS IN ISTANBUL STOCK EXCHANGE

Year 2023, Volume: 7 Issue: 1, 84 - 95, 30.03.2023

Vijdan Uğurluay Aslı Aybars

Abstract

By examining the factors that determine the capital structure for Turkish Real Estate Investment Trusts
(REITs) in Borsa Istanbul (BIST) over the period 2014-2020, we attempt to present a contribution to
the capital structure literature. In our study, we use panel data analysis that provide us proofs about
the impact of financial performance, stock performance, and corporate structure on capital structure
decisions of REITS. Some of the findings are remarkably similar to those of prior studies in this
array of literature while our independent variables and capital structure may seem to be connected
differently from the leading capital structure theories (“pecking order theory and trade-off theory”).
The prominent capital structure theories of pecking order and trade-off theory likewise receive mixed
support, although the link between capital structure and our independent variables appears to be
skewed. As a result, the theory’s assumptions indicate that capital structure changes are driven by
survival.

Keywords

REIT, Debt ratio, ISE, Trade-off Theory, Pecking Order Theory, Capital Structure, Turkey

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