THE IMPACT OF BUSINESS CONDITIONS ON RETAILERS AND WHOLESALERS: DOES LEVERAGE MATTER?

Halil D. Kaya
Additional contact information
Halil D. Kaya: NORTHEASTERN STATE UNIVERSITY

Annals - Economy Series, 2021, vol. 4, 72-83

Abstract: In this study, I examine the impact of business conditions on high-leverage and low-leverage U.S. retailers and wholesalers during the 2000-2005 period. I focus on firms’ profitability and liquidity values. My objective here is to see if business conditions affect high-leverage and low-leverage firms’ profitability and liquidity values in a similar fashion. In terms of profitability, I find that leverage is an important factor for both retailers and wholesalers. My results show that while business conditions significantly affect high-leverage retailers’ profitability, they do not affect low-leverage retailers’ profitability. The opposite is true for wholesalers: while business conditions do not significantly affect high-leverage wholesalers’ profitability, they do affect low-leverage wholesalers’ profitability. In other words, the profits of high-leverage retailers and low-leverage wholesalers are significantly affected by business conditions. In terms of liquidity, I find that leverage is an important factor for wholesalers, but not for retailers. While favorable business conditions affect high-leverage wholesalers’ liquidity values positively, the impact on low-leverage wholesalers’ liquidity value is negative.

Keywords: business conditions; business cycle; recession; retailers; wholesalers; leverage; profitability; liquidity (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.utgjiu.ro/revista/ec/pdf/2021-04/09_Halil.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cbu:jrnlec:y:2021:v:4:p:72-83

Access Statistics for this article

More articles in Annals - Economy Series from Constantin Brancusi University, Faculty of Economics Contact information at EDIRC.
Bibliographic data for series maintained by Ecobici Nicolae ( this e-mail address is bad, please contact ).