Access the full text.
Sign up today, get DeepDyve free for 14 days.
Bradford Hudson (1995)
Venture Capital in the Restaurant IndustryCornell Hotel and Restaurant Administration Quarterly, 36
The Journal of Finance, 60
D. Pope, H. Parsa, Amy Gregory (2011)
Why Do Restaurants Fail? Part III: An Analysis of Macro and Micro Factors
Michael Dalbor, Arun Upneja (2004)
The Investment Opportunity Set and the Long-Term Debt Decision of U.S. Lodging FirmsJournal of Hospitality & Tourism Research, 28
Kwanglim Seo, Amit Sharma (2018)
CEO Overconfidence and the Effects of Equity-Based Compensation on Strategic Risk-Taking in the U.S. Restaurant IndustryJournal of Hospitality & Tourism Research, 42
The Quarterly Journal of Economics, 128
Journal of Economic Perspectives, 18
Kwangmin Park, S. Jang (2013)
Capital structure, free cash flow, diversification and firm performance: a holistic analysis.International Journal of Hospitality Management, 33
Sung Mun, S. Jang (2015)
Working capital, cash holding, and profitability of restaurant firmsInternational Journal of Hospitality Management, 48
American Economic Review, 76
Thomas Bates, Kathleen Kahle, René Stulz (2006)
Why Do U.S. Firms Hold so Much More Cash than They Used to?Microeconomic Theory eJournal
S. Myers (1977)
Determinants of corporate borrowingJournal of Financial Economics, 5
Journal of Corporate Finance, 15
Journal of Finance, 69
Douglas Diamond, Zhiguo He (2012)
A Theory of Debt Maturity: The Long and Short of Debt OverhangEconometric Modeling: Corporate Finance & Governance eJournal
M. Kizildag (2015)
Financial leverage phenomenon in hospitality industry sub-sector portfoliosInternational Journal of Contemporary Hospitality Management, 27
Adam Wowak, Michael Mannor, Kaitlin Wowak (2015)
Throwing caution to the wind: The effect of CEO stock option pay on the incidence of product safety problemsStrategic Management Journal, 36
C. Enz (2010)
The Cornell School of hotel administration handbook of applied hospitality strategy
James Ang, Rebel Cole, James Lin (2000)
Agency Costs and Ownership StructureJournal of Finance, 55
Ji-Young Kim, Hyun-joong Kim, David Woods (2011)
Determinants of corporate cash-holding levels: an empirical examination of the restaurant industry.International Journal of Hospitality Management, 30
R. Rajan, Andrew Winton (1995)
Covenants and Collateral as Incentives to MonitorJournal of Finance, 50
David Denis, Valeriy Sibilkov (2007)
Financial Constraints, Investment, and the Value of Cash HoldingsCorporate Finance: Valuation
C. Muller (1999)
The business of restaurants: 2001 and beyond.International Journal of Hospitality Management, 18
Review of Financial Studies, 16
Richard Larrick, Katherine Burson, Jack Soll (2007)
Social comparison and confidence: When thinking you’re better than average predicts overconfidence (and when it does not)Organizational Behavior and Human Decision Processes, 102
Michael Barclay, Clifford Smith (1995)
The Maturity Structure of Corporate DebtJournal of Finance, 50
Journal of Accounting and Economics, 33
Michael Dalbor, Seoki Lee, Arun Upneja (2007)
An Investigation of Long-term Debt and Firm Value in the Lodging IndustryAdvances in Hospitality and Leisure, 3
Seoki Lee, Q. Xiao (2011)
An examination of the curvilinear relationship between capital intensity and firm performance for publicly traded US hotels and restaurantsInternational Journal of Contemporary Hospitality Management, 23
Yuanqiong He, Wenli Li, K. Lai (2011)
Service climate, employee commitment and customer satisfaction: Evidence from the hospitality industry in ChinaInternational Journal of Contemporary Hospitality Management, 23
Augustin Landier, D. Thesmar (2009)
Financial Contracting with Optimistic EntrepreneursReview of Financial Studies, 22
B. Tabachnick, L. Fidell (1983)
Using Multivariate Statistics
Journal of Finance, 61
Simon Gervais, J.B. Heaton, Terrance Odean (2011)
Overconfidence, Compensation Contracts, and Capital BudgetingBehavioral & Experimental Finance eJournal
H. Parsa, J. Self, David Njite, Tiffany King (2005)
Why Restaurants FailCornell Hotel and Restaurant Administration Quarterly, 46
Journal of Financial Economics, 3
Ulrike Malmendier, Geoffrey Tate, Jonathan Yan (2010)
Overconfidence and Early-Life Experiences: The Impact of Managerial Traits on Corporate Financial PoliciesERN: Behavioral Economics (Topic)
The Journal of Hospitality Financial Management, 25
Ulrike Malmendier, Geoffrey Tate (2003)
Who Makes Acquisitions? CEO Overconfidence and the Market's ReactionStanford Law School
Cornell Hospitality Quarterly, 36
Michael Dalbor, Arun Upneja (2002)
Growth Opportunities and the Long-Term Debt Decision of U.S. Lodging FirmsThe Journal of Hospitality Financial Management, 10
Michael Barclay, L. Marx, Clifford Smith (2001)
The Joint Determination of Leverage and MaturitySPGMI: Compustat Fundamentals (Topic)
B. Hall, Kevin Murphy (2000)
Stock Options for Undiversified ExecutivesS&P Global Market Intelligence Research Paper Series
S. Lee, S. Jang (2012)
The real estate risk of hospitality firms: Examining stock-return sensitivity to property valuesInternational Journal of Hospitality Management, 31
M. Stohs, D. Mauer (1996)
The Determinants of Corporate Debt Maturity StructureThe Journal of Business, 69
Nan Hua, Michael Dalbor (2013)
Evidence of franchising on outperformance in the restaurant industry: A long term analysis and perspective.International Journal of Contemporary Hospitality Management, 25
Aydin Ozkan (2000)
An empirical analysis of corporate debt maturity structureEuropean Financial Management, 6
J. Guedes, T. Opler (1996)
The Determinants of the Maturity of Corporate Debt IssuesJournal of Finance, 51
Journal of Financial Economics, 89
B. Guillet, Kwanglim Seo, D. Kucukusta, Seoki Lee (2013)
CEO duality and firm performance in the U.S. restaurant industry: Moderating role of restaurant typeInternational Journal of Hospitality Management, 33
Douglas Diamond (1991)
Debt Maturity Structure and Liquidity RiskQuarterly Journal of Economics, 106
Journal of Finance, 63
P. Brockman, Xiumin Martin, Emre Unlu (2009)
Executive Compensation and the Maturity Structure of Corporate DebtCapital Markets: Asset Pricing & Valuation
Michael Jensen (1986)
Agency Cost of Free Cash Flow, Corporate Finance, and TakeoversIndustrial Organization & Regulation eJournal
Michael Faulkender, Rong Wang (2004)
Corporate Financial Policy and the Value of CashS&P Global Market Intelligence Research Paper Series
Review of Financial Studies, 23
(1984)
The Capital Structure Puzzle
The Journal of Economic Perspectives, 15
C. Peake (2005)
The Capital Asset Pricing Model: Theory and EvidenceCfa Digest, 35
R. Rajan, Luigi Zingales (1994)
What Do We Know About Capital Structure? Some Evidence from International DataNBER Working Paper Series
A. Reich (1993)
Applied economics of hospitality production: reducing costs and improving the quality of decisions through economic analysisInternational Journal of Hospitality Management, 12
Ulrike Malmendier, Geoffrey Tate (2005)
Does Overconfidence Affect Corporate Investment? CEO Overconfidence Measures RevisitedExperimental & Empirical Studies eJournal
A. Goel, A. Thakor (2006)
Overconfidence, CEO Selection, and Corporate GovernanceFEN: Behavioral Finance (Topic)
H. DeAngelo, Ronald Masulis (1980)
Optimal Capital Structure Under Corporate and Personal TaxationERN: Personal Income & Other Non-Business Taxes & Subsidies (Topic)
S. Oak, Raghavan Iyengar (2009)
Investigating the differences in corporate governance between hospitality and nonhospitality firms, 5
D. Hackbarth (2009)
Determinants of Corporate Borrowing: A Behavioral PerspectiveBehavioral & Experimental Finance eJournal
International Journal of Contemporary Hospitality Management, 13
Michael Jensen, W. Meckling (1976)
Theory of the Firm
C. Muller, C. Inman (1996)
Characteristics and Behavior of Top Chain-Restaurant CEOsCornell Hotel and Restaurant Administration Quarterly, 37
Ulrike Malmendier, Geoffrey Tate (2002)
CEO Overconfidence and Corporate InvestmentAFA 2003 Washington
The Journal of Finance, 64
Journal of Corporate Finance, 9
M. Arellano, Stephen Bond (1991)
Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment EquationsThe Review of Economic Studies, 58
Michael Dalbor, Arun Upneja (2002)
Factors Affecting the Long-Term Debt Decision of Restaurant FirmsJournal of Hospitality & Tourism Research, 26
Amrik Singh (2011)
A restaurant case study of lease accounting impacts of proposed changes in lease accounting rulesInternational Journal of Contemporary Hospitality Management, 23
Angelo Camillo, D. Connolly, Woo Kim (2008)
Success and Failure in Northern CaliforniaCornell Hospitality Quarterly, 49
Arun Upneja, Michael Dalbor (2007)
Agency Costs, Bankruptcy Costs and the Use of Debt in Multinational Restaurant FirmsHospitality Review, 25
PurposeThis paper aims to find alternative explanations for the use of long-term debt in the US restaurant industry from a behavioral perspective. The three-fold purpose of the present study is to examine the impact of CEO overconfidence on the use of long-term debt; explore how CEO overconfidence moderates the relationship between growth opportunities and long-term debt; and analyze the moderating role of CEO overconfidence based on cash flow levels in the context of the restaurant industry.Design/methodology/approachUsing a sample of publicly traded US restaurant firms between 1992 and 2015, this study used generalized methods of moments with instrumental variable technique to analyze the panel data.FindingsThe findings of this study highlight the importance of considering behavioral traits of CEOs, such as overconfidence to better understand the US restaurant firms’ financing behaviors. This study found that overconfident CEOs tend to use more long-term debt when firms have greater growth opportunities and low cash flow.Practical implicationsGiven that psychological and behavioral features of CEOs are critical in understanding the variations in corporate financing decisions and capital structure, shareholders and boards of directors of growth-seeking restaurant firms should incorporate the behavioral aspects of overconfident CEOs in the design of long-term debt contracts to mitigate liquidation risk while developing compensation practices that encourage overconfident CEOs to finance growth.Originality/valueDespite its heavy reliance on long-term debt in the US hospitality industry, prior studies provided mixed findings for the determinants of long-term debt. This study makes a contribution to the literature by offering alternative approaches to examining long-term debt decisions among US restaurant firms.
International Journal of Contemporary Hospitality Management – Emerald Publishing
Published: May 8, 2017
Read and print from thousands of top scholarly journals.
Already have an account? Log in
Bookmark this article. You can see your Bookmarks on your DeepDyve Library.
To save an article, log in first, or sign up for a DeepDyve account if you don’t already have one.
Copy and paste the desired citation format or use the link below to download a file formatted for EndNote
Access the full text.
Sign up today, get DeepDyve free for 14 days.
All DeepDyve websites use cookies to improve your online experience. They were placed on your computer when you launched this website. You can change your cookie settings through your browser.