Type of Submission

Refereed Article


The purpose of this study is to examine the choice of long-term debt in the U.S. casino industry using the three major theories of capital structure: tradeoff, pecking order and free cash flow. We utilize multiple regression models for the overall sample as well as for casinos and casino hotels. The results for all three sets of regressions are similar with firm risk and firm size being positively related to long-term debt. However, when looking at different measures of growth opportunities, we find contradictory results. Some growth measures are positively related to long-term debt while others are negatively related.