The Impact of Capital Structure on Entry Mode: Hospitality Industry in the United States

• Main Authors: Wu, Shu-I, 吳書儀
• Other Authors: Wang, Yu-Kai
• Format: Others
• Language: en_US
• Published: 2014
• Online Access: http://ndltd.ncl.edu.tw/handle/85nr94

碩士 === 東吳大學 === 企業管理學系 === 102 === Since Modigliani–Miller proposed capital structure irrelevance theory in 1958, there are lots of studies related to the issue, most of studies examined the relationship between capital structure and performance; however, fewer researchers explored the impact of capital structure on entry mode. Therefore, this study applied hospitality industry which was listed companies in the U.S. in 2001 to 2010. The purpose is to find out the characteristic of capital structure in hospitality industry in the U.S. to enter a new market by acquisition or joint venture by using five financial ratios (debt ratio, ratio of fixed assets to total assets, long term assets to long term obligation, ratio of intangibles assets to total assets and return on intangible assets). Findings suggest that the firm with higher intangible assets to total assets and fixed assets to total assets prefer to choose acquisition while the firm with a higher debt ratio is prone to joint venture. The enterprise with higher long term assets to long term obligation and return on intangible assets have no effect on entry mode selection between acquisition and joint venture.