L’ENDETTEMENT AFFECTE-T-IL LA PROFITABILITÉ? LE CAS DES FIRMES AGRO-ALIMENTAIRES FRANÇAISES

DOES DEBT AFFECT PROFITABILITY? THE CASE OF FRENCH AGRO-FOOD FIRMS

Mazen Kebewar

MPRA Paper from University Library of Munich, Germany

Abstract: This article aims to expand existing empirical knowledge on the impact of debt level on profitability of companies. We analyze a sample of 568 unlisted French companies (Agro-food sector) spanning over a period of 1999 to 2006. We show, by using the generalized method of moments (GMM), that debt affects negatively on the profitability, but this effect is negligible and sometimes insignificant according to the ratio of profitability used (Prof1, Prof2 or ROA). Furthermore, we find existence of non-linear relationship (concave curve) between level of debt and profitability, but this non-linear impact is validated only in the case of very small enterprises.

Keywords: Debt; profitability; panel data; GMM; Endettement; profitabilité; données de panel; GMM (search for similar items in EconPapers)
JEL-codes: C33 G32 L25 (search for similar items in EconPapers)
Date: 2012-11-24
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Working Paper: L'ENDETTEMENT AFFECTE-T-IL LA PROFITABILITÉ? LE CAS DES FIRMES AGRO-ALIMENTAIRES FRANÇAISES (2012)
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