Type of Submission

Refereed Article


This study aims to identify the sector-specific performance determinants of capital structure for hospitality firms listed in India. The sector-specific variables studied include average daily room rent (ADRR), occupancy rate (OR), and revenue per room (RevPAR). The sample for this study consisted of 42 hospitality firms listed in India, and the data for sample firms from 2014 to 2021 were collected from CMIE Prowess, RBI bulletin, and annual reports of the sample firms. We have used three proxies for capital structure: total debt ratio and long-term and short-term debt ratios. The GMM regression models indicate that ARDD, OR, and RevPAR are significant determinants of the total, long-term, and short-term debt ratios. The results of both the GMM regression models are qualitatively almost the same. We conclude that industry-specific variables should also be considered to understand the capital structure decisions of the hospitality sector.