Determinants of Capital Expenditures in the U.S. Restaurant Industry

Citation data:

Vol: 21, Issue: 2

Publication Year:
2014
Usage 38
Abstract Views 38
Repository URL:
https://scholarworks.umass.edu/jhfm/vol21/iss2/2
Author(s):
Dalbor, Michael; Jiang, Lan
Tags:
Capital Expenditures; Restaurant Industry; Hospitality Financial Management
article description
The purpose of this paper is to study the determinants of capital expenditures in the U.S. restaurant industry. We hypothesize that restaurant firms with growth opportunities, free cash flow and above-average earnings will have a positive impact on capital expenditures. We also believe larger firms will make more capital expenditures. Conversely, we expect that strong economic conditions will have a negative impact on capital expenditures. We utilize a sample of 78 firms from 2002-2012 and our regression model results indicate all of our variables have significant coefficients in the expected direction. This is the first major research paper to examine the determinants of capital expenditures in the U.S. restaurant industry.