Ownership structure in BIST - Capital structure relation Granger causality test a comparative application between BIST industrial index and service index

Abstract

Abstract. In this study, it was aimed to determine whether there is a bidirectional relationship between the ownership and capital structures through the variables representing the ownership and capital structures of 142 businesses, which are included in the Service and Industrial Indexes of Borsa Istanbul (BIST) between the years of 2006-2014. The capital structure in the research is represented by the leverage ratio (TBTV), which determines the extent to which a business is dependent on debt and to determine how much of the assets owned by the business are financed with debt, while the ownership structure is represented by the largest shareholder’s equity (EBOP), the foreign share (YAP), the corporate investor ratio (KURY) and the number of the shareholders with more than 10% share of the business (ORTAK). The factors influencing the bi-directional causality between the ownership and the capital structures were researched with the Panel Vector Autoregressive Model (VAR). In the scope of the VAR analysis, Granger causality test and the impulse response analyzes were also performed. It was found in the result of the analysis that in the model where the capital structure (TBTV) is a dependent variable in the service index, none of the independent variables belonging to the ownership structure has a causality relation through the TBTV. In the model where the variables belonging to the ownership structure were dependent variables, it was found that the independent variable belonging to the capital structure (TBTV) is the reason of the change in the ownership variables of EBOP, HAO and KURY variables. According to the results obtained, 1 period delay in the capital structure causes decrease in EBOP and HAO; increase in KURY. As to the businesses in the industrial index, a causality relationship was not seen between the ownership structures and the capital structures in the context of these variables and the two structures do not effect each other. Keywords. Ownership structure, Capital structure, Granger casuality, BIST. JEL. C33,G10, G32.