Factors that Determine the Capital Structure: An Empirical Study on Low-cost Airlines


Kiraci K., Aydin N.

SCIENTIFIC ANNALS OF ECONOMICS AND BUSINESS, vol.65, no.3, pp.227-246, 2018 (ESCI) identifier identifier

  • Publication Type: Article / Article
  • Volume: 65 Issue: 3
  • Publication Date: 2018
  • Doi Number: 10.2478/saeb-2018-0018
  • Journal Name: SCIENTIFIC ANNALS OF ECONOMICS AND BUSINESS
  • Journal Indexes: Emerging Sources Citation Index (ESCI), Scopus
  • Page Numbers: pp.227-246
  • Keywords: low-cost airlines, Pecking order theory, trade-off theory, panel data analysis, PECKING ORDER THEORY, TESTING TRADE-OFF, STRUCTURE DECISIONS, STRUCTURE CHOICE, COUNTRY, FIRM, PERFORMANCE, SMES, ADJUSTMENT, FINANCE
  • Anadolu University Affiliated: Yes

Abstract

The purpose of this study is to identify the factors that determine the capital structure of low-cost airlines. Accordingly, it is aimed to test the factors that determine the capital structure in low-cost airlines in the context of capital structure theories. In the study, 15 airline companies, which had continuous financial data during the 2004-2015 period, were examined empirically. Panel data analysis was used as a method in the study. Findings of the study show that low-cost airlines generally operate based on the trade-off theory while borrowing in the short-term and based on the pecking order theory while borrowing in the long-term.