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Determinants of Financing Decisions of SMEs: Evidence from Hotel Industry

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  • Andreas Mueller
  • Luca Sensini

Abstract

This paper intends to analyze the determinants of hotel SMEs' capital structure, using the theoretical reference framework and the main indicators suggested by the Trade-off and the Pecking Order theories. The financial information was collected from the AIDA database and concerned a sample of 145 Italian hotel SMEs. To evaluate the capital structure, we used a set of dependent (Total Debt, Long Term Debt and Short-Term Debt) and independent (Profitability, Assets Tangibility, Growth, Size and Age) variables consolidated in the literature. After testing the least-squares model (POLS) and the fixed effects model (FEM), we chose to use the FEM model for our analysis, as it had a greater explanatory capacity. The results showed that the variables considered have a different weight in explaining hotel companies' capital structure. In particular, profitability, assets tangibility and size were the most significant variables, while the growth and age showed less relevance.

Suggested Citation

  • Andreas Mueller & Luca Sensini, 2023. "Determinants of Financing Decisions of SMEs: Evidence from Hotel Industry," International Journal of Business and Management, Canadian Center of Science and Education, vol. 16(3), pages 117-117, April.
    • Handle: RePEc:ibn:ijbmjn:v:16:y:2023:i:3:p:117
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    References listed on IDEAS

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    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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