Comparison of debt financing between international and domestic firms: Evidence from Turkey, Germany and UK
Purpose – To investigate relative differences in debt financing between international and domestic industrial firms operating in Turkey, Germany and the UK. Design/methodology/approach – Analysis depends on multivariate regression analysis, while controlling the effects of firm-specific characteristics, industry effects and controlling shareholders. The approach is to examine the effects of the features of the financial markets and institutions in the sample countries. Findings – Turkish international firms use higher total debts than domestic firms. However, no strong evidence is found for the sample of German and UK firms to support this result. The major finding is that, apart from the effects of firm-specific factors, industry and controlling shareholders, Turkish international firms increase their debt financing at a fixed rate. Research limitations/implications – The basic features of Turkish financial markets and institutions, especially bank ownership of equity in firms, are the major reason for the differences between the results in the sample countries. Originality/value – This paper provides an international comparison for the dissimilarity in debt financing between international and domestic firms.
Capital structure, Debt financing, Emerging markets, International organizations, Shareholders
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