L’ENDETTEMENT AFFECTE-T-IL LA PROFITABILITÉ? LE CAS DES FIRMES AGRO-ALIMENTAIRES FRANÇAISES

Kebewar, mazen (2012): L’ENDETTEMENT AFFECTE-T-IL LA PROFITABILITÉ? LE CAS DES FIRMES AGRO-ALIMENTAIRES FRANÇAISES.

Abstract

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.

• Item Type: MPRA Paper
• English Title: DOES DEBT AFFECT PROFITABILITY? THE CASE OF FRENCH AGRO-FOOD FIRMS
• Language: French
• Keywords: Debt, profitability, panel data, GMM, Endettement, profitabilité, données de panel, GMM
• Subjects: L - Industrial Organization > L2 - Firm Objectives, Organization, and Behavior > L25 - Firm Performance: Size, Diversification, and Scope; G - Financial Economics > G3 - Corporate Finance and Governance > G32 - Financing Policy ; Financial Risk and Risk Management ; Capital and Ownership Structure ; Value of Firms ; Goodwill; C - Mathematical and Quantitative Methods > C3 - Multiple or Simultaneous Equation Models ; Multiple Variables > C33 - Panel Data Models ; Spatio-temporal Models

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