The Impact of the Covid-19 Pandemic on Capital Structure: Evidence from Turkey

This study aims to understand the effect of the Covid-19 Pandemic on corporate leverage by using the 364 publicly traded non-financial firms’ balance sheets at Borsa İstanbul. Results show that while leverage (total debt/total assets) of highly affected sectors have substantially increased immediately, leverage of less affected sectors remained resilient. On the other hand, all firms’ leverage have increased in the medium term due to favorable financial conditions. Our results are robust for alternative leverage ratios and control variables.