Determinants of Financing Decisions of SMEs: Evidence from Hotel Industry

Andreas Mueller and Luca Sensini

International Journal of Business and Management, 2023, vol. 16, issue 3, 117

Abstract: This paper intends to analyze the determinants of hotel SMEs' capital structure, using the theoretical reference framework and the main indicators suggested by the Trade-off and the Pecking Order theories. The financial information was collected from the AIDA database and concerned a sample of 145 Italian hotel SMEs. To evaluate the capital structure, we used a set of dependent (Total Debt, Long Term Debt and Short-Term Debt) and independent (Profitability, Assets Tangibility, Growth, Size and Age) variables consolidated in the literature. After testing the least-squares model (POLS) and the fixed effects model (FEM), we chose to use the FEM model for our analysis, as it had a greater explanatory capacity. The results showed that the variables considered have a different weight in explaining hotel companies' capital structure. In particular, profitability, assets tangibility and size were the most significant variables, while the growth and age showed less relevance.

Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:ibn:ijbmjn:v:16:y:2023:i:3:p:117

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