Financing Decisions of SMEs in the Hotel Industry

The purpose of this paper is to investigate the relationship between investment and financing decisions, focusing on small and medium-sized enterprises (SMEs) operating in the hotel industry. To achieve this purpose, it was carried out a dataset of 72 SMEs (492 firms/year observations). The sample includes Italian SMEs for the period 2010 – 2015. All the firms included in the sample fall into the definition of SMEs given in European Commission recommendation 2003/361/EC of 6 May 2003. Descriptive statistics, Pearson correlation, and CCA were used. The findings showed the relationship between the groups of balance sheet items. However, results also highlight that firms used their own resources, typically associated with long-term investments, to finance current assets. This behavior may have been caused by environmental and/or market conditions. In particular, the credit crunch that followed the 2008 financial crisis may have affected business behavior. results indicate a high level of consistency investments financial medium/long-term funding The high relationship between and LTL shows that fixed assets are mainly financed by medium/long-term debt. This evidence suggests that the properties were used as collateral for the loan, reducing the information creditor and debtor. The high relationship indicates consistent financial highlighting that current assets mainly liabilities characterized by the same maturity.