Impact of financial leverage on the performance of tourism firms in the MENA region

Abstract

Purpose – Leverage refers to the use of borrowed capital to finance investment projects. The question of how much debt is optimal for a firm has always been challenging for business managers and scholars alike. Most empirical studies have tried to achieve this, but no conclusive findings have been produced yet. The debt-equity balance changes with the industry, and what is optimal for one industry may not be so for another. Our study aims to determine the impact of leverage on the financial performance of tourism firms in the MENA region. Methodology – To this purpose, we have collected data from a sample of 71 listed firms from the tourism sector. We have employed pooled and static panel regression, using published financial information from 2010 to 2021 in the MENA region. We obtained an unbalanced and cross-sectional panel of 768 firm-year observations from the 71 firms used in the study. Findings – The findings reveal that leverage represented by the debt ratio and equity ratio has a significant negative impact on the financial performance of tourism firms represented by ROA and ROE. Conclusion – The implication of the study findings is that debt levels beyond a certain level can be detrimental to firm performance. Consistent with the trade-off theory, managers must carefully balance the advantages and disadvantages of borrowings over their own capital. Keywords: MENA, tourism industry, performance, profitability, leverage, capital structure. JEL Codes: M41, Z33

Research on the Use of Non-Inflective Forms of the Verb by the Students of Gjakova

“…In Bardhi (1635) (Demiraj, 2008) it can be found as: :kini me gjetun; për të bam, për të shkuam; tue fjetun, tue votë, tye kryqzuam, tye ndenjun, nuku desh ta pinjë.…”

The Impact of Financial Leverage on the Financial Performance of the Firms Listed on the Tokyo Stock Exchange

“…Financial leverage is borrowing debt to expand one's asset base. Leverage is a way to get a higher rate of return on money that has been invested (Demiraj et al, 2023). There is a higher chance of failure if too much financial leverage is used, as servicing the loan becomes more challenging.…”

From the Austrian-Hungarian Point of View: An der schönen blauen Donau and the Accursed Black Mountain Wreath in the Balkans

“…the language of inhabitants of Epirus. 12 Current critical readings often notice the formulation in less than a single line of Leibniz's assumption of the Illyrian origins of Albanian language as an opinio communis of the intellectual quarters of the time, which must have led Leibniz to a "pseudo-identification of Albanian as an Illyrian language." 13 It was also considered "an extraordinary intuition of the genius Leibniz" in the history of Albanologie, 14 which "might be weighed up to be correct according the standards of today's knowledge."…”

“…13 It was also considered "an extraordinary intuition of the genius Leibniz" in the history of Albanologie, 14 which "might be weighed up to be correct according the standards of today's knowledge." 15 Leibniz inferred his assumptions from a polyglottic situation in which Albanian-speaking people lived in the sixteenth and seventeenth centuries under Ottoman rule. Though largely confined to the domain of oral expression, since at least the sixteenth century, Albanian language nourished several ecclesiastical literatures.…”