Capital structure plays an important role in the realization of company activities and it explains a resource structure emerging as a result of business activities. The literature describes the variability of capital structure of the company with a number of country and firm-specific factors. This study also determines the capital structure of the company and country-specific factors were investigated. For this purpose, the capital structure of a total of 192 firms in the manufacturing industry sector in Borsa Istanbul, was examined between 2003 and 2015. For the analysis of unbalanced panel data set, a dynamic model is created and system GMM estimation method is preferred. Independent variables of the research is determined by taking into consideration of trade-off theory, pecking order theory and other accepted models of capital structure. According to the results, capital structure of the companies in the manufacturing industry has a negative relationship with profitability, asset structure, liquidity ratio, efficiency of asset utilization and current account deficit and also it has a positive relationship with firm size and nominal interest rate. Growth capacity, business risk, inflation and GDP growth have been found ineffective variables on capital structure decisions. Companies in the manufacturing industry, also covered by sub-sector; but sector has concluded that ineffective in capital structure decisions.
Key Words: Capital Structure, Dynamic Panel Data, System GMM, Manufacturing Industry, Capital Structure Theory