Macro and Micro Dynamıcs of Profitability in the Textile, Wearing Apparel and Leather Industry in Turkey

The textile, wearing apparel, leather (TWL) industry has a labor-intensive production structure. Especially in developing countries, the sector is considered to be a very important sector for national economies due to its potential impact on industrialization, production volume and employment. In recent years Turkey is one of the leading countries in the world TGD industry and strengthens its position in the world market. For the development of this sector, the companies in the sector need to show a stable financial performance. One of the most important determinants of financial performance is profitability indicators. For this reason, it is important to determine the profitability of the companies in the sector and the factors affecting the profitability in order to continue the development of this sector. These factors can be internal as well as external. Therefore, the aim of the study is to determine the factors that affect the operating profitability of companies operating in the TWL sector, traded in Borsa Istanbul between the years 2013-2020. For this purpose, the annual financial data and selected macroeconomic indicators of 20 TWL traded in Borsa Istanbul during the relevant period has been analyzed with the Arrellano-Bover//Blundell-Bond (1998) Two-Stage System GMM estimator. As a result of the analyzes, statistically significant relationships has been found between operating profit and lagged value of operating profit, financial leverage ratio, firm size, economic growth, manufacturing industry capacity utilization rate and inflation rate. According to the analysis findings, the lagged value of operating profit, firm size, economic growth and inflation rate are positive on operating profit and the use of financial leverage and interest rate have a negative effect on operating profit.during the relevant period.