Capital Structure Determinants of Greek Hotels: The Impact of the Greek Debt Crisis

Panagiotis E. Dimitropoulos () and Konstantinos Koronios
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Panagiotis E. Dimitropoulos: University of Peloponnese
Konstantinos Koronios: University of Peloponnese

A chapter in Culture and Tourism in a Smart, Globalized, and Sustainable World, 2021, pp 387-402 from Springer

Abstract: Abstract This paper studies the firm-specific determinants of capital structure during the period of debt crisis utilizing panel data of 120 Greek hotel firms during the period of 2003–2016. A random effect panel regression analysis was performed on firm-specific determinants of capital structure before (2003–2010) and after (2011–2016) the Greek sovereign debt crisis. This study tests the efficiency of trade-off theory and pecking order theory, finding that asset tangibility is directly and positively related to total leverage and long-term leverage especially during the debt crisis period, while non-debt tax shields and tax payments are negatively and significantly impacting total leverage for both sub-periods. Finally, growth opportunities seem to have a differential impact on both total and long-term leverage between the pre- and post-crisis periods. Specifically, firms with high growth opportunities were associated with lower long-term and total leverage after the crisis suggesting a reduction of growth firms’ debt exposure during that period. This is the first study in the literature considering a vast sample of non-listed hotel firms and utilizing a sample period before the Greek sovereign debt crisis; thus, we are able to extract more efficient inferences regarding the impact of firm-specific determinants on the capital structure of hotel corporations.

Keywords: Hotel industry; Capital structure decisions; Crisis; Greece (search for similar items in EconPapers)
JEL-codes: G32 M21 (search for similar items in EconPapers)
Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:spr:prbchp:978-3-030-72469-6_26

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DOI: 10.1007/978-3-030-72469-6_26

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