The effect of debt on corporate profitability: Evidence from French service sector

Arbeitspapier

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).

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Documents de Recherche LEO ; No. 2013-01

Classification and Topics

• Classification: Wirtschaft ; Multiple or Simultaneous Equation Models: Panel Data Models; Spatio-temporal Models ; Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill ; Firm Performance: Size, Diversification, and Scope
• Subject: Debt ; GMM ; Panel data ; Profitability

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Kebewar, Mazen ; Shah, Syed Muhammad Noaman Ahmed
• Event: Veröffentlichung
• (who): Laboratoire d'Economie d'Orléans
• (where): Orléans
• (when): 2013-01

Further information

• Handle: http://hdl.handle.net/10419/73556
• Last update: 10.03.2025, 11:43 AM CET