The Effects of Short-Term Liabilities on Profitability: The Case of Germany

Using data from Germany this paper examines the direct effect of non-financial firms' use of short-term versus long-term liabilities. We develop a structural model of a firm's value maximization problem that predicts that profitability of the firm will change if firms alter their use of short-term versus long-term liabilities. We find that firms that rely more heavily on short-term liabilities are likely to be more profitable

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Year of publication:	2007-02-02
Authors:	Baum, Christopher F. ; Schaefer, Dorothea ; Talavera, Oleksandr
Institutions:	Money Macro and Finance Research Group
Subject:	profitability \| short-term liabilities \| maturity structure \| capital structure

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Extent:	application/pdf
Series:	Money Macro and Finance (MMF) Research Group Conference 2006.
Type of publication:	Book / Working Paper
Language:	English
Notes:	The text is part of a series 2006 MMF Conference Papers Number 61
Classification:	G32 - Financing Policy; Capital and Ownership Structure ; G30 - Corporate Finance and Governance. General
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10004977148