Kebewar, mazen and SHAH, Syed Muhammad Noaman Ahmed (2012): The effect of debt on corporate profitability: Evidence from French service sector.
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Abstract
Current study aims to provide new empirical evidence on the impact of debt on corporate profitability. This impact can be explained by three essential theories: signaling theory, tax theory and the agency cost theory. Using panel data sample of 2240 French non listed companies of service sector during 1999-2006. By utilizing generalized method of moments (GMM) econometric technique on three measures of profitability ratio (PROF1, PROF2 and ROA), we show that debt ratio has no effect on corporate profitability, regardless of the size of company (VSEs, SMEs or LEs).
| Item Type: | MPRA Paper |
|---|---|
| Original Title: | The effect of debt on corporate profitability: Evidence from French service sector |
| Language: | English |
| Keywords: | Debt, GMM, Panel data, Profitability |
| 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 |
| Item ID: | 43304 |
| Depositing User: | Mazen KEBEWAR |
| Date Deposited: | 19 Dec 2012 02:13 |
| Last Modified: | 27 Sep 2019 17:50 |
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| URI: | https://mpra.ub.uni-muenchen.de/id/eprint/43304 |
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