Abstract:

In this study, the change in the rate of correction of short-term debts for companies in Turkey between 2003 and 2017 was studied using a dynamic model. In our work to understand how the global financial crisis affects the company’s borrowing structure, our analysis is focused on the difference between these periods by dividing them into two subperiods. The global crisis offers an important natural opportunity to understand the impact of financial instability on the real economy, especially the impact of companies on the debt balance structure. The smallest quarters have been shown to reduce the optimal debt rate for Turkish companies in the period 2003-2017 using the LSDVC method. Companies are reducing their short-term debt settlement rates after the global financial crisis. This result may be due to a decrease in credit supply as a result of a decrease in borrowing appetite during the global financial crisis. Another reason that supports the interest effect is that, as long-term debts become expensive during and after the financial crisis, companies increase their short-term debt demands. This study is the first study to provide evidence to Turkish companies that financial crises have shortened the optimal debt rate due to the reduction of the credit supply and the reduction of the long-term credit demand. Our findings show how the crisis affects corporate debt behavior and the use of credit channels that companies should take into account the crisis environment when making debt deadline decisions.

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