Short-term debt and firm performance in the US restaurant industry: The moderating role of economic conditions

Seoki Lee, Michael C. Dalbor

Research output: Contribution to journalArticlepeer-review

4 Scopus citations

Abstract

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.

Original languageEnglish (US)
Pages (from-to)565-581
Number of pages17
JournalTourism Economics
Volume19
Issue number3
DOIs
StatePublished - Jun 2013

All Science Journal Classification (ASJC) codes

  • Geography, Planning and Development
  • Tourism, Leisure and Hospitality Management

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