Jul 28th, 4:45 PM - 4:45 PM
An Empirical Investigation of the Lease-Debt Relation in the Restaurant and Retail Industry
Denver, Colorado USA
Prior research empirical research has produced conflicting findings on the lease-debt relation. While some studies provide evidence that leases substitute for debt, other studies show the lease-debt relation to be complementary. This study investigated the lease-debt relation in a sample of 233 restaurant and retail firms from 2006-2008. The results show that leasing and debt are significantly and inversely related. On average, $1 of leasing displaced approximately $0.50 of debt. The results also provide additional evidence that growth opportunities and firm size are important determinants of leasing.