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L'Endettement Affecte-T-Il La Profitabilité? Le Cas Des Firmes Agro-Alimentaires Françaises

  • Mazen Kebewar

    ()

    (LEO - Laboratoire d'économie d'Orleans - CNRS - UO - Université d'Orléans)

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.

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Paper provided by HAL in its series Working Papers with number halshs-00756972.

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Date of creation: 24 Nov 2012
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Handle: RePEc:hal:wpaper:halshs-00756972
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  1. Christopher F. Baum & Dorothea Schaefer & Oleksandr Talavera, 2007. "The Effects of Short-Term Liabilities on Profitability: The Case of Germany," Money Macro and Finance (MMF) Research Group Conference 2006 61, Money Macro and Finance Research Group.
  2. Mazen Kebewar, 2012. "L'Impact De L'Endettement Sur La Profitabilité Une Étude Empirique Sur Données Françaises En Panel," Working Papers halshs-00749685, HAL.
  3. R Blundell & Steven Bond, . "Initial conditions and moment restrictions in dynamic panel data model," Economics Papers W14&104., Economics Group, Nuffield College, University of Oxford.
  4. Christopher F. Baum & Dorothea Schäfer & Oleksandr Talavera, 2006. "The Effects of Short-Term Liabilities on Profitability: A Comparison of German and US Firms," Boston College Working Papers in Economics 636, Boston College Department of Economics, revised 14 Apr 2007.
  5. Paulo J. Maçãs Nunes & Zélia M. Serrasqueiro & Tiago N. Sequeira, 2007. "Profitability in Portuguese service industries: a panel data approach," The Service Industries Journal, Taylor & Francis Journals, vol. 29(5), pages 693-707, May.
  6. Manuel Arellano & Stephen Bond, 1991. "Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations," Review of Economic Studies, Oxford University Press, vol. 58(2), pages 277-297.
  7. Arellano, Manuel & Bover, Olympia, 1995. "Another look at the instrumental variable estimation of error-components models," Journal of Econometrics, Elsevier, vol. 68(1), pages 29-51, July.
  8. Laurent Weill, 2008. "Leverage and corporate performance: does institutional environment matter?," ULB Institutional Repository 2013/14343, ULB -- Universite Libre de Bruxelles.
  9. Himmelberg, Charles P. & Hubbard, R. Glenn & Palia, Darius, 1999. "Understanding the determinants of managerial ownership and the link between ownership and performance," Journal of Financial Economics, Elsevier, vol. 53(3), pages 353-384, September.
  10. Mazen Kebewar, 2012. "La structure du capital et la profitabilité : Une étude empirique sur données de panel françaises," Working Papers hal-00751211, HAL.
  11. Berger, Allen N. & Bonaccorsi di Patti, Emilia, 2006. "Capital structure and firm performance: A new approach to testing agency theory and an application to the banking industry," Journal of Banking & Finance, Elsevier, vol. 30(4), pages 1065-1102, April.
  12. Dimitris Margaritis & Maria Psillaki, 2007. "Capital Structure and Firm Efficiency," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 34(9-10), pages 1447-1469.
  13. Francesco Nucci & Alberto F. Pozzolo & Fabiano Schivardi, 2005. "Is Firm's Productivity Related to its Financial Structure? Evidence from Microeconomic Data," Rivista di Politica Economica, SIPI Spa, vol. 95(1), pages 269-290, January-F.
  14. Mazen KEBEWAR, 2012. "La structure du capital et la profitabilité Une étude empirique sur données françaises en panel," LEO Working Papers / DR LEO 972, Orleans Economics Laboratory / Laboratoire d'Economie d'Orleans (LEO), University of Orleans.
  15. Margaritis, Dimitris & Psillaki, Maria, 2010. "Capital structure, equity ownership and firm performance," Journal of Banking & Finance, Elsevier, vol. 34(3), pages 621-632, March.
  16. Majumdar, Sumit K & Chhibber, Pradeep, 1999. "Capital Structure and Performance: Evidence from a Transition Economy on an Aspect of Corporate Governance," Public Choice, Springer, vol. 98(3-4), pages 287-305, March.
  17. Marc Deloof, 2003. "Does Working Capital Management Affect Profitability of Belgian Firms?," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 30(3-4), pages 573-588.
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