Short-Term Debt and Firm Performance in the US Restaurant Industry: The Moderating Role of Economic Conditions

Based on the strategic debt argument, this study hypothesizes that short-term debt generally leads a restaurant firm to poor performance due to the lack of a strategic approach from using short-term debt. The study further examines the moderating role of economic conditions in the relationship betwe...

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Bibliographic Details
Published inTourism economics : the business and finance of tourism and recreation Vol. 19; no. 3; pp. 565 - 581
Main Authors Lee, Seoki, Dalbor, Michael C.
Format Journal Article
LanguageEnglish
Published London, England SAGE Publications 01.06.2013
Sage Publications Ltd
Subjects
Debt
Economic conditions
Enterprises
Financial performance
Hospitality
Impact analysis
Regression analysis
Restaurants
Short term debt
Strategic management
Studies
U.S.A
United States > US
moderating effect
hotel industry
short-term debt
economic conditions
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Summary:Based on the strategic debt argument, this study hypothesizes that short-term debt generally leads a restaurant firm to poor performance due to the lack of a strategic approach from using short-term debt. The study further examines the moderating role of economic conditions in the relationship between short-term debt and firm performance through a pooled regression analysis with heteroscedasticity-consistent standard errors. The data are from publicly traded US restaurant firms for the period 1990–2009. The findings support the research hypothesis that short-term debt in general has a negative impact on the performance of restaurant firms, while the negative effects are significantly reduced during economic downturns.
Bibliography:ObjectType-Article-2
SourceType-Scholarly Journals-1
ObjectType-Feature-1
content type line 23
ISSN:1354-8166
2044-0375
DOI:10.5367/te.2013.0219