Determinants of Indebtedness in Expanding Portuguese Hotels

The hotel industry has been one of the fastest-growing economic sectors in Portugal recent years. According to European Best Destinations website, consolidated itself as a destination excellence. explanation capital structure firms remains relevant financial research. However, prior international empirical evidence is not exclusive and still scarce Portuguese sector, which motivated this This study aimed analyse influence determinants on 821 hotels between 2011 2019 (until constraints COVID-19 pandemic affected tourism sector) determine whether strategies were conducted according trade-off pecking order theories. used an econometric approach based static panel data model, with tests recommending fixed effects model estimated by least squares dummy variables (LSDV) within. analysed return assets, size, tangibility, growth opportunities, risk other tax benefits besides debt explain indebtedness through three alternative measures. results research show that managers sought optimal combination equity debt, was weighted savings cost distress. they pursued objective hierarchical sequencing funding sources minimise costs information asymmetry.