IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v10y2018i9p2985-d165187.html
   My bibliography  Save this article

An Exploration of the Debt Ratio of Ski Lift Operators

Author

Listed:
  • Martin Falk

    (Austrian Institute of Economic Research (WIFO), 1030 Vienna, Austria)

  • Robert Steiger

    (Department of Public Finance, University of Innsbruck, 6020 Innsbruck, Austria)

Abstract

This article examines the determinants of the debt-to-capital ratio of ski lift operators. The analysis is based on the total population of 248 ski lift operators in Austria. The median debt-to-capital ratio is 73%, with a highly skewed distribution, where almost every fourth operator exhibits negative equity capital. Robust regressions show that the debt-to-capital ratio significantly depends on the size of the ski area, elevation, location, presence of a neighboring ski area, supply of accommodation nearby, and the proportion of foreign overnight stays. However, the significance and magnitude of these factors differ between East and West Austria. For eastern Austria, larger ski operators, with neighboring resorts close by and a vast supply of accommodation, have a significantly lower debt-to-capital ratio. In western Austria, elevation and presence of a neighbor are significant predictors. Operators with a neighbor nearby exhibit a 15-percentage-point lower debt ratio.

Suggested Citation

  • Martin Falk & Robert Steiger, 2018. "An Exploration of the Debt Ratio of Ski Lift Operators," Sustainability, MDPI, vol. 10(9), pages 1-16, August.
    • Handle: RePEc:gam:jsusta:v:10:y:2018:i:9:p:2985-:d:165187
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2071-1050/10/9/2985/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2071-1050/10/9/2985/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Ivo Welch, 2004. "Capital Structure and Stock Returns," Journal of Political Economy, University of Chicago Press, vol. 112(1), pages 106-131, February.
    2. Jeffrey H. Fischer & Joseph E. Harrington Jr., 1996. "Product Variety and Firm Agglomeration," RAND Journal of Economics, The RAND Corporation, vol. 27(2), pages 281-309, Summer.
    3. Wilbur Chung & Arturs Kalnins, 2001. "Agglomeration effects and performance: a test of the Texas lodging industry," Strategic Management Journal, Wiley Blackwell, vol. 22(10), pages 969-988, October.
    4. Woo Gon Kim, 1997. "The Determinants of Capital Structure Choice in the US Restaurant Industry," Tourism Economics, , vol. 3(4), pages 329-340, December.
    5. Brida, Juan Gabriel & Deidda, Manuela & Pulina, Manuela, 2014. "Tourism and transport systems in mountain environments: analysis of the economic efficiency of cableways in South Tyrol," Journal of Transport Geography, Elsevier, vol. 36(C), pages 1-11.
    6. Daniel Scott & Geoff McBoyle, 2007. "Climate change adaptation in the ski industry," Mitigation and Adaptation Strategies for Global Change, Springer, vol. 12(8), pages 1411-1431, October.
    7. Falk, Martin, 2017. "Gains from horizontal collaboration among ski areas," Tourism Management, Elsevier, vol. 60(C), pages 92-104.
    8. Camille Gonseth, 2013. "Impact of snow variability on the Swiss winter tourism sector: implications in an era of climate change," Climatic Change, Springer, vol. 119(2), pages 307-320, July.
    9. Edward I. Altman, 1968. "The Prediction Of Corporate Bankruptcy: A Discriminant Analysis," Journal of Finance, American Finance Association, vol. 23(1), pages 193-194, March.
    10. Oliver E. Williamson, 1967. "Hierarchical Control and Optimum Firm Size," Journal of Political Economy, University of Chicago Press, vol. 75(2), pages 123-123.
    11. Myers, Stewart C. & Majluf, Nicholas S., 1984. "Corporate financing and investment decisions when firms have information that investors do not have," Journal of Financial Economics, Elsevier, vol. 13(2), pages 187-221, June.
    12. Rutty, Michelle & Scott, Daniel & Johnson, Peter & Pons, Marc & Steiger, Robert & Vilella, Marc, 2017. "Using ski industry response to climatic variability to assess climate change risk: An analogue study in Eastern Canada," Tourism Management, Elsevier, vol. 58(C), pages 196-204.
    13. Harris, Milton & Raviv, Artur, 1991. "The Theory of Capital Structure," Journal of Finance, American Finance Association, vol. 46(1), pages 297-355, March.
    14. Firgo, Matthias & Kügler, Agnes, 2018. "Cooperative pricing in spatially differentiated markets," Regional Science and Urban Economics, Elsevier, vol. 73(C), pages 51-67.
    15. Barth, Mary E. & Beaver, William H. & Landsman, Wayne R., 1998. "Relative valuation roles of equity book value and net income as a function of financial health," Journal of Accounting and Economics, Elsevier, vol. 25(1), pages 1-34, February.
    16. Myers, Stewart C., 1984. "Capital structure puzzle," Working papers 1548-84., Massachusetts Institute of Technology (MIT), Sloan School of Management.
    17. Marsh, Paul, 1982. "The Choice between Equity and Debt: An Empirical Study," Journal of Finance, American Finance Association, vol. 37(1), pages 121-144, March.
    18. DaÅ¡a FarÄ nik & Kir KuÅ¡Ä er & Domen Trobec, 2015. "Indebtedness of the Tourism Sector in Mediterranean Countries," Tourism Economics, , vol. 21(1), pages 141-157, February.
    19. Myers, Stewart C, 1984. "The Capital Structure Puzzle," Journal of Finance, American Finance Association, vol. 39(3), pages 575-592, July.
    20. Stewart C. Myers, 1984. "Capital Structure Puzzle," NBER Working Papers 1393, National Bureau of Economic Research, Inc.
    21. Murray Z. Frank & Vidhan K. Goyal, 2009. "Capital Structure Decisions: Which Factors Are Reliably Important?," Financial Management, Financial Management Association International, vol. 38(1), pages 1-37, March.
    22. Stewart C. Myers & Nicholas S. Majluf, 1984. "Corporate Financing and Investment Decisions When Firms Have InformationThat Investors Do Not Have," NBER Working Papers 1396, National Bureau of Economic Research, Inc.
    23. Ayberk Nuri Berkman & Omer Iskenderoglu & Erdinc Karadeniz & Nazif Ayyildiz, 2016. "Determinants of Capital Structure: The Evidence from European Energy Companies," International Journal of Business Administration, International Journal of Business Administration, Sciedu Press, vol. 7(6), pages 96-106, November.
    24. 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.
    25. Bartolom� Marco-Lajara & Enrique Claver-Cort�s & Mercedes Úbeda-Garc�a & Patrocinio Del Carmen Zaragoza-S�ez, 2016. "Hotel Performance and Agglomeration of Tourist Districts," Regional Studies, Taylor & Francis Journals, vol. 50(6), pages 1016-1035, June.
    26. Matthew L. Freedman & Renáta Kosová, 2012. "Agglomeration, product heterogeneity and firm entry," Journal of Economic Geography, Oxford University Press, vol. 12(3), pages 601-626, May.
    27. Falk, Martin, 2013. "A survival analysis of ski lift companies," Tourism Management, Elsevier, vol. 36(C), pages 377-390.
    28. Edward I. Altman, 1968. "Financial Ratios, Discriminant Analysis And The Prediction Of Corporate Bankruptcy," Journal of Finance, American Finance Association, vol. 23(4), pages 589-609, September.
    29. Marshall, Alfred, 1920. "Industry and Trade," History of Economic Thought Books, McMaster University Archive for the History of Economic Thought, edition 3, number marshall1920.
    30. Rajan, Raghuram G & Zingales, Luigi, 1995. "What Do We Know about Capital Structure? Some Evidence from International Data," Journal of Finance, American Finance Association, vol. 50(5), pages 1421-1460, December.
    31. Cassar, Gavin, 2004. "The financing of business start-ups," Journal of Business Venturing, Elsevier, vol. 19(2), pages 261-283, March.
    32. Vincenzo Verardi & Christophe Croux, 2009. "Robust regression in Stata," Stata Journal, StataCorp LP, vol. 9(3), pages 439-453, September.
    33. Ohlson, Ja, 1980. "Financial Ratios And The Probabilistic Prediction Of Bankruptcy," Journal of Accounting Research, Wiley Blackwell, vol. 18(1), pages 109-131.
    34. María Jesús Such Devesa & Laura Parte Esteban & Antonio Garre Martínez, 2009. "The Financial Structure of the Spanish Hotel Industry: Evidence from Cluster Analysis," Tourism Economics, , vol. 15(1), pages 121-138, March.
    35. Myers, Stewart C., 1977. "Determinants of corporate borrowing," Journal of Financial Economics, Elsevier, vol. 5(2), pages 147-175, November.
    36. Nikhil Varaiya & Roger A. Kerin & David Weeks, 1987. "The relationship between growth, profitability, and firm value," Strategic Management Journal, Wiley Blackwell, vol. 8(5), pages 487-497, September.
    37. Maria Jesus Such Devesa & Laura Parte Esteban, 2011. "Spanish hotel industry: indebtedness determinants," Applied Economics, Taylor & Francis Journals, vol. 43(28), pages 4227-4238.
    38. Beaudin, Laura & Huang, Ju-Chin, 2014. "Weather conditions and outdoor recreation: A study of New England ski areas," Ecological Economics, Elsevier, vol. 106(C), pages 56-68.
    39. Luís Pacheco & Fernando Tavares, 2017. "Capital structure determinants of hospitality sector SMEs," Tourism Economics, , vol. 23(1), pages 113-132, February.
    40. Thomas Dyllick & Kai Hockerts, 2002. "Beyond the business case for corporate sustainability," Business Strategy and the Environment, Wiley Blackwell, vol. 11(2), pages 130-141, March.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Martin Falk & Robert Steiger, 2020. "Size facilitates profitable ski lift operations," Tourism Economics, , vol. 26(7), pages 1197-1211, November.
    2. Ferrarese, Moreno & Loner, Enzo & Pulina, Manuela, 2021. "Demand, business profitability and competitiveness in the cableway system: A multidimensional framework," Research in Transportation Economics, Elsevier, vol. 90(C).
    3. Patricia Aranda-Cuéllar & José María López-Morales & María Jesús Such-Devesa, 2021. "Winter tourism dependence: A cyclical and cointegration analysis. Case study for the Alps," Tourism Economics, , vol. 27(7), pages 1540-1560, November.
    4. Xin Long Xu & Chao Sun & Yi Li & Nidi Zhou, 2020. "The Effects of Environmental Management and Debt Financing on Sustainable Financial Growth in the Tourism Industry," SAGE Open, , vol. 10(3), pages 21582440209, August.
    5. Mayer, Marius & Bichler, Bernhard Fabian & Pikkemaat, Birgit & Peters, Mike, 2021. "Media discourses about a superspreader destination: How mismanagement of Covid-19 triggers debates about sustainability and geopolitics," Annals of Tourism Research, Elsevier, vol. 91(C).
    6. Alessandro Danovi & Francesca Magno & Giovanna Dossena, 2018. "Pursuing Firm Economic Sustainability through Debt Restructuring Agreements in Italy: An Empirical Analysis," Sustainability, MDPI, vol. 10(12), pages 1-10, December.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Luís Pacheco & Fernando Tavares, 2017. "Capital structure determinants of hospitality sector SMEs," Tourism Economics, , vol. 23(1), pages 113-132, February.
    2. Amini, Shahram & Elmore, Ryan & Öztekin, Özde & Strauss, Jack, 2021. "Can machines learn capital structure dynamics?," Journal of Corporate Finance, Elsevier, vol. 70(C).
    3. Murat Kizildag & Ozgur Ozdemir, 2017. "Underlying factors of ups and downs in financial leverage overtime," Tourism Economics, , vol. 23(6), pages 1321-1342, September.
    4. Antonczyk, Ron Christian & Salzmann, Astrid Juliane, 2014. "Overconfidence and optimism: The effect of national culture on capital structure," Research in International Business and Finance, Elsevier, vol. 31(C), pages 132-151.
    5. Wong, Kacheng & Zhao, Longkai, 2023. "Customer–supplier relationships and non-linear financial policy response," Journal of Empirical Finance, Elsevier, vol. 73(C), pages 180-205.
    6. Mohamed, Hisham Hanifa & Masih, Mansur & Bacha, Obiyathulla I., 2015. "Why do issuers issue Sukuk or conventional bond? Evidence from Malaysian listed firms using partial adjustment models," Pacific-Basin Finance Journal, Elsevier, vol. 34(C), pages 233-252.
    7. Feld, Lars P. & Heckemeyer, Jost H. & Overesch, Michael, 2013. "Capital structure choice and company taxation: A meta-study," Journal of Banking & Finance, Elsevier, vol. 37(8), pages 2850-2866.
    8. Glenn Boyle & Kelly Eckhold, 1997. "Capital structure choice and financial market liberalization: evidence from New Zealand," Applied Financial Economics, Taylor & Francis Journals, vol. 7(4), pages 427-437.
    9. Li, Larry & Islam, Silvia Z., 2019. "Firm and industry specific determinants of capital structure: Evidence from the Australian market," International Review of Economics & Finance, Elsevier, vol. 59(C), pages 425-437.
    10. Clemente-Almendros, José A. & Sogorb-Mira, Francisco, 2018. "Costs of debt, tax benefits and a new measure of non-debt tax shields: examining debt conservatism in Spanish listed firms," Revista de Contabilidad - Spanish Accounting Review, Elsevier, vol. 21(2), pages 162-175.
    11. İbrahim Yarba & Z. Nuray Güner, 2020. "Leverage dynamics: Do financial development and government leverage matter? Evidence from a major developing economy," Empirical Economics, Springer, vol. 59(5), pages 2473-2507, November.
    12. Mai, Nhat Chi, 2012. "Market timing, taxes and capital structure: evidence from Vietnam," OSF Preprints t3mvs, Center for Open Science.
    13. Tom Vanacker & Sophie Manigart, 2010. "Pecking order and debt capacity considerations for high-growth companies seeking financing," Small Business Economics, Springer, vol. 35(1), pages 53-69, July.
    14. Giorgio Canarella & Stephen M. Miller, 2019. "Determinants of Optimal Capital Structure and Speed of Adjustment: Evidence from the U.S. ICT Sector," Working papers 2019-06, University of Connecticut, Department of Economics.
    15. Shoaib Ali & Attiya Yasmin Javid, 2015. "Relationship between Credit Rating, Capital Structure and Earning Management Behaviour: Evidence from Pakistani Listed Firms," PIDE-Working Papers 2015:121, Pakistan Institute of Development Economics.
    16. Faisal Seraj Alnori & Ali Mohsen Shaddady, 2019. "Corporate Debt Choice and Board Size: The Case of Oil Exporting Economy," Journal of Applied Finance & Banking, SCIENPRESS Ltd, vol. 9(5), pages 1-6.
    17. Saumitra, Bhaduri, 2012. "Why do firms issue equity? Some evidence from an emerging economy, India," MPRA Paper 38043, University Library of Munich, Germany.
    18. Vivien Beattie & Alan Goodacre & Sarah Jane Thomson, 2006. "Corporate Financing Decisions: UK Survey Evidence," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 33(9‐10), pages 1402-1434, November.
    19. Vo, Xuan Vinh, 2017. "Determinants of capital structure in emerging markets: Evidence from Vietnam," Research in International Business and Finance, Elsevier, vol. 40(C), pages 105-113.
    20. Cai, Jie & Zhang, Zhe, 2011. "Leverage change, debt overhang, and stock prices," Journal of Corporate Finance, Elsevier, vol. 17(3), pages 391-402, June.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jsusta:v:10:y:2018:i:9:p:2985-:d:165187. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.