Operating Leverage, Profitability and Capital Structure

Operating leverage increases profitability and reduces optimal financial leverage. Thus, operating leverage generates a negative relation between profitability and financial leverage that is thought to be inconsistent with the trade-off theory, but is commonly observed in the data. We demonstrate the effect of operating leverage on firms' profitability and financial leverage, as well as on the empirical relation between profitability and financial leverage, by using China's entry into the World Trade Organization in 2001 and its effect on the capital-labor ratio of US firms

MoreLess

Year of publication:	2017
Authors:	Chen, Zhiyao
Other Persons:	Harford, Jarrad V. T. (contributor) ; Kamara, Avraham (contributor)
Publisher:	[2017]: [S.l.] : SSRN
Subject:	operating leverage \| capital structure \| financial leverage \| trade-off theory \| profitability \| default risk \| Kapitalstruktur \| Capital structure \| Theorie \| Theory \| Rentabilität \| Profitability \| Fremdkapital \| Debt financing \| Kreditrisiko \| Credit risk \| Gewinn \| Profit

freely available

Full text |

More access options

doi.org

Check Google Scholar

In German libraries (KVK)

I need help

Which error do you want to report?

Report: URL of this record is broken

Please note: Sometimes more than one URL is available for a resource. Please click on "More Options" to display these URLs

Report: Addition of an URL to that resource

Please note: Sometimes more than one URL is available for a resource. Please click on "More Options" to display these URLs

Report: The language(s) of that resource is/are…

Please note: Required language not in the list? Please use comment field

Report: Addition of an identifier to that resource

Report: report typo

Report: Add statement

Report: Add keywords

Please use the commentary box to describe other errors

Would you like to receive a feedback?

Commentary

Please type the code from the image

For general questions please use this address.

Persistent link: https://www.econbiz.de/10012974654