Agency Costs, Bankruptcy Costs and the Use of Debt in Multinational Restaurant Firms

Authors

Arun Upneja, The Pennsylvania State UniversityFollow
Michael C. Dalbor, University of Nevada, Las Vegas

Program Web Address

www.hhdev.psu.edu/shm

Abstract

The purpose of this paper is to understand whether multinational restaurant firms (MNRF’s) have higher agency and expected bankruptcy costs. Given this expectation, this may have an impact on the amount of debt incurred by MNRF’s. Overall, the findings are consistent with the existing literatue in terms of the positive relationship between MNRF’s and agency and bankruptcy cost. However, it was found that MNRF’s also have more total debt. This is surprising given the higher agency and bankruptcy costs. The importance of this research is that there may be considerations other than agency and bacnkruptcy costs affecting the capital structure decisions of MNRF’s.

Recommended Citation

Upneja, Arun and Dalbor, Michael C. (2007) "Agency Costs, Bankruptcy Costs and the Use of Debt in Multinational Restaurant Firms," Hospitality Review: Vol. 25: Iss. 1, Article 3.
Available at: https://digitalcommons.fiu.edu/hospitalityreview/vol25/iss1/3