An empirical framework of financial characteristics and outperformance in troubled economic times: Evidence from the restaurant industry

Nan Hua, Qu Xiao, Elizabeth Yost

Research output: Journal article publicationJournal articleAcademic researchpeer-review

9 Citations (Scopus)


Purpose: The purpose of this paper is to explore the financial characteristics associated with outperformance of US public restaurant firms in challenging economic times and the empirical measure of outperformance proposed herein. Design/methodology/approach: This study utilizes a Logit model and considers the relevant financial variables in annual deviation forms to explore an empirical model that explains financial outperformance in troubled economic times for the restaurant industry. Findings: The results of the study indicate that larger market share, asset turnover, and profit margin, combined with lower leverage, BM, earnings variance, and size, in addition to franchise utilization, appear to produce collectively a fine balance for success in difficult economic times. Research limitations/implications: This paper does not address the fine balance between short-term financial performance and long-term sustainability. Further, the employed contemporaneous modeling framework may limit generality of findings of this paper. Originality/value: This study provides systematic evidence on an empirical framework linking financial characteristics and outperformance of restaurant firms in difficult economic times. Its results have timely and significant implications for practitioners, researchers and other parties of interest.
Original languageEnglish
Pages (from-to)945-964
Number of pages20
JournalInternational Journal of Contemporary Hospitality Management
Issue number6
Publication statusPublished - 21 Aug 2013


  • Economic downturns
  • Financial outperformance
  • Financial performance
  • National economy
  • Restaurants
  • United States of America

ASJC Scopus subject areas

  • Tourism, Leisure and Hospitality Management

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