The low level of interest rates in international money markets since 2009 led to an abundance of liquidity in capital markets. The abundance of liquidity lasted until 2019, after which interest rates rose sharply in line with the decisions taken, beginning a period of liquidity scarcity. The purpose of this study is to examine whether the relationship between firms' leverage, external borrowing level and market capitalization is affected differently during periods of liquidity abundance and scarcity. In the study, the analysis was conducted using 190 companies and 52 quarterly data for the period 2010-2022, which covers the periods of liquidity abundance and scarcity of Borsa Istanbul manufacturing industry companies. In addition to the system GMM estimator, models are estimated with the Driscoll-Kraay method, which is another robust estimation method. AsAa result of the analysis, it is observed that the estimation findings of the models differ according to the period of liquidity abundance and scarcity. During the liquidity abundance period, there is a positive relationship between the leverage level of firms and market capitalization, while there is no relationship between external borrowing levels and market capitalization. On the other hand, in the period of liquidity scarcity, it is found that the external debt of companies has a decreasing effect on market value and there is no relationship between leverage level and market value. The opposite findings in both periods may indicate that the tax saving advantage of financial leverage has an impact on this process due to different interest rates.