Short-term debt and long-term debt determinants in small and medium-sized hospitality firms

Paulo Maçãs Nunes and Zélia Serrasqueiro
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Paulo Maçãs Nunes: Beira Interior University and CEFAGE-UBI research unit, Portugal
Zélia Serrasqueiro: Beira Interior University and CEFAGE Research Centre, Portugal

Tourism Economics, 2017, vol. 23, issue 3, 543-560

Abstract: In this article, based on a sample of 177 hotel small and medium-sized enterprises (SMEs) for the period 2004–2012, our objective is to test the applicability of trade-off theory and pecking order theory (POT) to the capital structure decisions of hotel SMEs, focusing on analysis of short-term and long-term debt. The multiple empirical evidence obtained here allows us to conclude that the applicability of trade-off theory to hotel SMEs’ capital structure decisions is much greater in relation to long-term debt than short-term debt and, on the contrary, the applicability of POT is much greater in relation to short-term debt than long-term debt. The empirical evidence obtained allows us to make suggestions for the owners/managers of hotel SMEs.

Keywords: hotel small and medium enterprises; long-term debt; pecking order theory; short-term debt; trade-off theory (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:sae:toueco:v:23:y:2017:i:3:p:543-560

DOI: 10.5367/te.2015.0529

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