Credit Fluctuations and Lodging Firms: An Investigation of the Differing Capital Structures in the US Lodging Industry

摘要

This study empirically investigates the effect of credit availability and firm size on the leverage of lodging industry in United States using a 3 X 2 factorial Multivariate Analysis of Variance (MANOVA). Three time points of differing credit availability (Low, High, and Average) were identified using Case-Shiller home price index. Leverage, Net Leverage, and Short-to-Long-Term debt ratios of large and small US lodging firms were analyzed at these differing credit availability time points to assess any significant differences. Specifically, this study attempts to find whether there is an interaction effect of credit availability and firm size on the leverage of lodging firms. Significant effects of firm size and credit availability were found on the leverage and net leverage of lodging firms. Furthermore, significant interaction effects of credit availability and firm size on leverage and net leverage were found in lodging firms. No significant effects of credit availability and firm size were found on the short-to-long-term-debt ratio in US lodging firms. Also, no significant interaction effect was found on the short-to-long-term-debt ratio of US lodging firms. Implications of this study’s findings for both the large and small lodging firms are discussed at the end.