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Capital structure adjustments of Hotel SMEs in Portugal’s hospitality industry during the COVID-19 pandemic
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Resumo(s)
The COVID-19 pandemic triggered an unprecedented economic shock, disrupting business operations and demand across sectors. This study examines the impact of the COVID-19 pandemic on the capital structure of small and medium-sized enterprises (SMEs) in the Portuguese hotel sector, a core segment of the hospitality industry and one of the most severely affected by the crisis. Using a panel dataset of private hotel firms in Portugal, we find a significant reduction in total debt during the pandemic. Decomposing debt by maturity reveals that firms reduced short-term borrowing while expanding long-term financing, indicating a recomposition of the debt structure during the pandemic. Furthermore, when firms are segmented by size, the reduction in total leverage was concentrated among smaller, financially constrained firms, while the expansion in long-term financing was observed among larger, financially unconstrained firms. A further decomposition of total liabilities into financial and operating components reveals that financial and operating liabilities responded in opposite directions during the pandemic: operating liabilities contracted, while financial liabilities, notably long-term financial debt, increased. This study contributes to the literature on capital structure, corporate finance, and crisis management by providing one of the first empirical assessments of COVID-19's effects on SME financing in a tourism-dependent, bank-reliant economy, a context that remains understudied. It also extends prior research by focusing on private rather than public firms. By examining a highly vulnerable sector, the findings offer insights into financial resilience during crises and provide policy implications for improving liquidity access and strengthening financial stability among tourism-dependent hotel SMEs.
Descrição
Palavras-chave
Capital structure Pandemic Hospitality industry Leverage Private firms
Contexto Educativo
Citação
Editora
Elsevier Ltd.