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

Christopher Baum, Dorothea Schaefer and Oleksandr Talavera ()
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Dorothea Schaefer: DIW Berlin
Authors registered in the RePEc Author Service: Dorothea Schäfer

No 61, Money Macro and Finance (MMF) Research Group Conference 2006 from Money Macro and Finance Research Group

Abstract: 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

Keywords: profitability; short-term liabilities; maturity structure; capital structure (search for similar items in EconPapers)
JEL-codes: G30 G32 (search for similar items in EconPapers)
Date: 2007-02-02
New Economics Papers: this item is included in nep-bec and nep-cfn
References: Add references at CitEc
Citations: View citations in EconPapers (13)

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http://repec.org/mmf2006/up.25583.1145029704.pdf (application/pdf)

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Working Paper: The Effects of Short-Term Liabilities on Profitability: The Case of Germany (2006)
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Persistent link: https://EconPapers.repec.org/RePEc:mmf:mmfc06:61

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