Impact of ownership structure on leverage of non-financial firms in developing countries

The effects of the ownership structure on the performance of a firm has been widely discussed in the past literature; however, the relationship between ownership structure and capital structure is not much examined. Those that discuss this issue are mostly conducted in developed countries due to the availability of the business sector data. The aim of this study is to focus on whether the ownership structure can help in explaining the variation of capital structure in developing countries, the case of Turkey. In this study, with a comprehensive literature review, the empirical evidence is used through theoretical framework. The analysis of the study is divided into three parts. First, the negative relationship between managerial ownership and capital structure. Second, the impact of ownership concentration (large shareholding) on debt/equity ratio. Last, the impact of both managerial ownership and external block holders on leverage.