Jul 30th, 11:30 AM - 12:30 PM


Restaurant Industry Risk Dimensions and their Influence on Operating Cash Flows


This paper fills a critical void by investigating underlying dimensions that influence the restaurant industry’s cash flows. First, this study develops a set of restaurant industry risk factors (constructs). Next, it is found that the three factor model accounts for 32% of the variation in restaurant industry operating cash flows. The model remains robust after conducting regression analysis with backward elimination procedure. As a result, this paper provides further support to the claim that industry effects are important determinants of explaining the variation in profits (McGahan & Porter, 1997).