Capital structure of Portuguese hotel firms: a structural equation modelling approach
This paper addresses capital structure determinants for Portuguese hotel firms between 2006 and 2014. Secondary data from 356 hotel units was analysed using the partial least squares (PLS) statistical technique, a variance-based structural equation modelling (SEM). The results show that the expl...
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| Main Authors: | , , |
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| Format: | Article |
| Language: | English |
| Published: |
University of Algarve, ESGHT/CINTURS
2018-01-01
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| Series: | Tourism & Management Studies |
| Subjects: | |
| Online Access: | https://tmstudies.net/index.php/ectms/article/view/1050/pdf_91 |
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| Summary: | This paper addresses capital structure determinants for Portuguese
hotel firms between 2006 and 2014. Secondary data from 356 hotel
units was analysed using the partial least squares (PLS) statistical
technique, a variance-based structural equation modelling (SEM). The
results show that the explanatory variables proposed as capital
structure determinants have an impact on the financing and debt
decisions made by the firms in the sample. Of these, tangibility has
the greater explanatory power. Overall, the results support the
notion that trade-off theory and pecking-order theory are important
in explaining the capital structure of the Portuguese hotel industry,
particularly as regards the agency conflicts triggered by growth
opportunities and the preference firms have for internal funding. The
results also point to the importance of collateral in accessing credit
and the lesser impact of asymmetric information pertaining to
tangible asset value and firm size. The results suggest small firms find
it difficult to contract loans, which can somewhat limit their growth
and performance. |
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| ISSN: | 2182-8466 |