The effect of debt on corporate profitability: Evidence from French service sector

Mazen Kebewar

Working Papers from HAL

Abstract: Current study aims to provide new empirical evidence on the impact of debt on corporate profitability. This impact can be explained by three essential theories: signaling theory, tax theory and the agency cost theory. Using panel data sample of 2240 French non listed companies of service sector during 1999-2006. By utilizing generalized method of moments (GMM) econometric technique on three measures of profitability ratio (PROF1, PROF2 and ROA), we show that debt ratio has no effect on corporate profitability, regardless of the size of company (VSEs, SMEs or LEs).

Keywords: Debt; GMM; Panel data; Profitability (search for similar items in EconPapers)
Date: 2012-12-10
New Economics Papers: this item is included in nep-acc
Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-00766758v2
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Citations: View citations in EconPapers (5)

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Related works:
Working Paper: The effect of debt on corporate profitability: Evidence from French service sector (2014)
Journal Article: The effect of Debt on Corporate Profitability:Evidence from French Service Sector (2013)
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