Sectoral Differences in Fixed Asset Financing: Evidence from Turkish Manufacturing Sub-sectors

Abstract

This paper aims to identify the differences in fixed asset financing across Turkish manufacturing sub-sectors using data from 123 firms traded on the Borsa Istanbul (BIST) during the period 2010-2022. A five-stage panel regression methodology is followed. Employing panel regression models separately built for each manufacturing sub-sector the study examines the impact of short-term borrowing decisions, long-term financing options, and financial performance on fixed asset investments. The findings reveal a significant dampening effect of short-term borrowing decisions on fixed asset investments across all manufacturing sub-sectors. Moreover, the study underscores significant variations in the effects of long-term financing options and financial performance on fixed asset investments across manufacturing sub-sectors. The findings emphasize that sectoral characteristics play an important role in fixed asset finance planning and that the principle of maturity matching is a determining approach in financing strategies.