Financial leverage phenomenon in hospitality industry sub sector portfolios
Purpose This paper aims to seek answers to a primary question: "How much do divergent leverage factors account for fluctuations in time varying financial leverage in leading hospitality sub sectors decomposed by four exclusive sub portfolios?" In the path of seeking answers, this paper investigated the effects of both firm specific and macroeconomic indicators to firms' varying financial leverage in those primary sub sectors overtime. Design/methodology/approach In each sub sector portfolios, firms were sorted based on market to book values (Mktbk it with median breakpoint percentiles. For hypothesis testing, this paper constructed panel regression models with firm fixed effects to layout fluctuant financial leverage phenomenon engaged with a set of 11 leverage factors in each Mktbk it sorted sub sector portfolios. Findings Results exhibited assorted evidences. The bottom line was: firms with different market capitalization rates in each portfolio acted differently in regard to the magnitude of fi.