An examination of capital structure in the restaurant industry

• Published in: International journal of contemporary hospitality management Vol. 13; no. 2; pp. 54 - 59
• Main Authors: Upneja, Arun, Dalbor, Michael C
• Format: Journal Article
• Language: English
• Published: Bradford MCB UP Ltd 01.04.2001; Emerald Group Publishing Limited
• Subjects: Age; Asymmetry; Bankruptcy; Capital structure; Cash flow; Cognition & reasoning; Costs; Current liabilities; Debt; Decision making; Equity financing; Financial performance; Financing; Hospitality industry; Hotels & motels; Hypotheses; Long term debt; Profitability; Profits; Ratios; Restaurants; Retained earnings; Startups; Stockholders; Studies; United States > US; Debt; Financing; Restaurants; Capital structure
• ISSN: 0959-6119; 1757-1049
• DOI: 10.1108/09596110110381825

Examines the capital structure decisions of restaurant firms. Hypothesizes that these decisions are based upon a financial "pecking-order" as well as the position of the firm in the financial growth cycle. Using ratios from publicly-traded restaurant firms in the USA and ordinary least squares regression models, the results tend to support the notion that both the pecking-order and the financial growth cycle influence financing decisions. However, the results also indicate that there may be separate factors affecting long-term and short-term debt decisions made by restaurant managers.