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The Effects of Short-Term Liabilities on Profitability: A Comparison of German and US Firms

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Author Info
Christopher F. Baum () (Boston College, DIW Berlin)
Dorothea Schäfer () (DIW Berlin)
Oleksandr Talavera () (DIW Berlin)

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Abstract

The paper adopts the methodology of the empirical finance literature to analyze a common question that liability maturity structure has an impact on firm performance. A comparison is made between two countries, the US and Germany, with different types of financial systems. We find that German firms that rely more heavily on short-term liabilities are likely to be more profitable. The link between liability maturity structure and profitability does not appear in the results from the US sample, which reflects the importance of institutional factors.

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Publisher Info
Paper provided by Boston College Department of Economics in its series Boston College Working Papers in Economics with number 636.

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Length: 19 pages
Date of creation: 13 Feb 2006
Date of revision: 14 Apr 2007
Handle: RePEc:boc:bocoec:636

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Related research
Keywords: profitability; short-term liabilities; maturity structure; capital structure.;

Find related papers by JEL classification:
G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Capital and Ownership Structure
G30 - Financial Economics - - Corporate Finance and Governance - - - General

This paper has been announced in the following NEP Reports:

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