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

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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)

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.

Suggested Citation

  • Paulo Maçãs Nunes & Zélia Serrasqueiro, 2017. "Short-term debt and long-term debt determinants in small and medium-sized hospitality firms," Tourism Economics, , vol. 23(3), pages 543-560, May.
    • Handle: RePEc:sae:toueco:v:23:y:2017:i:3:p:543-560
    DOI: 10.5367/te.2015.0529
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