Akademik Veri Yönetim Sistemi
Investment Management and Financial Innovations, cilt.4, sa.2, ss.71-76, 2007 (Scopus)
Adjusting financial ratios to industry targets is an important reserach field in the finance literature. Empirical evidences suggest that firms do adjust their financial ratios to industry targets. Using the partial adjustment model, we employ the pooled OLS to investigate the behaviour of financial ratios of 100 firms in Turkish manufacturing industry for the period 1996 through 2004. The results indicate that the financial ratios are periodically adjusted to their industry means. But the speed of adjustment of all the financial ratios for Turkish manufacturing firms is slower than that for firms of transition countries and Western firms reported in earlier studies. The turnover ratios have lower adjustment speed than short-term liquidity ratios. The adjustment coefficients are the largest for short-term liquidity ratios. Therefore, these ratios can be adjusted in the short run more easily than the turnover ratios. © Songul Kakilli Acaravci, 2007.