The determinants of capital structure in the hospitality industry
Abstract
The capital structure of the hospitality industry was explored in this research. The extensive literature of capital structure was reviewed and an empirical analysis was done. The whole study was composed of two parts. First, the determinants of capital structure in the restaurant industry with a primary SIC code 58 were investigated. OLS regression analysis was used to assess the role of some important variable such as size, earning volatility, profitability, growth opportunities, asset structure, non-debt tax shields, leasing, and franchising on the various measure of financial leverage. Second, an in-depth analysis was conducted of the determinants of capital structure in the hotel industry with a primary SIC code 70. The purposes of this study were: (1) to identify the determinants of the capital structure of firms in the hospitality industry; (2) to extend the range of theoretical determinants of capital structure by examining some industry-specific variables that have never previously been analyzed empirically. This paper presents an empirical analysis of the capital structure of hospitality industry. This study focused on explaining important characteristics affecting the capital structure of U.S. hospitality firms. This cross-sectional analysis assessed the role of size, earning volatility, profitability, growth opportunities, asset structure, non-debt tax shields, leasing, franchising, and management company dummy on leverage ratios.
Degree
Ph.D.
Advisors
Hiemstra, Purdue University.
Subject Area
Finance|Business costs
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