Business, Management and Accounting
3 years ago

Debt financing hurts firm performance, internal funding boosts success in auto industry.

1 view
The effects of external debt financing and internal financing on firm performance: empirical evidence from automobile listed firms
Li Yan

Paper Summary

The study looked at how different types of financing affect the performance of automobile companies. They found that using more debt can actually hurt a company's performance, while using internal funds can help it. This means that relying on loans can create problems between owners and lenders, leading to lower performance. On the other hand, using money from within the company can be better for its success.

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