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Title:The Effects of Short-Term Liabilities on Profitability: The Case of Germany PDF Logo
Authors:Baum, Christopher F.
Schäfer, Dorothea
Talavera, Oleksandr
Issue Date:2006
Series/Report no.:DIW-Diskussionspapiere 635
Abstract:Using data from Germany this paper examines the direct effect of non-financial firms' use of short-term versus long-term liabilities. We develop a structural model of a firm's value maximization problem that predicts that profitability of the firm will change if firms alter their use of short-term versus long-term liabilities. We find that firms that rely more heavily on short-term liabilities are likely to be more profitable.
Subjects:profitability
short-term liabilities
maturity structure
capital structure
JEL:G32
G30
Document Type:Working Paper
Appears in Collections:Publikationen von Forscherinnen und Forschern des DIW
DIW-Diskussionspapiere

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