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Understanding the cost of capital of logistics service providers: an empirical investigation of multiple contingency variables
Journal
Logistics Research
ISSN
1865-035X
ISSN-Digital
1865-0368
Type
journal article
Date Issued
2014-11-11
Author(s)
Hofmann, Erik
Abstract
The article analyzes the influence of company-, industry- and market-related variables on the cost of capital of logistics service providers, as well as on their systematic risk. Financial information has become more and more important in strategic decision making (especially in the international context); in addition of being a measure of performance, the cost of capital is an important variable for logistics service providers in decisions about investing capital and developing the appropriate strategy. In total, financial data on over 700 logistics service providers for a period of 10 years were analyzed applying multiple regression analysis. Our results show that the logistics service industry is rather nonvolatile from an investor's viewpoint. Microeconomic variables significantly influence the cost of capital of logistics service providers, whereas systematic risk is influenced by macroeconomic variables. In both cases, significance is strongly dependent on the services offered and financial structure of the companies, although the headquarters location is irrelevant. Main implication of our study underlines the specific interdependencies of strategic decision making and cost of capital of logistics service providers. As recent research made only little efforts in linking the fields of business logistics and corporate finance, we follow a broad research approach to give a first comprehensive overview on this interdisciplinary topic.
Language
English
Keywords
Cost of capital
Systematic risk
Key financial figures
Logistics service providers
Strategic decisions
Value creation
HSG Classification
contribution to scientific community
HSG Profile Area
SoM - Business Innovation
Refereed
Yes
Publisher
Springer
Publisher place
Berlin
Volume
7
Number
1
Start page
1
End page
25
Pages
25
Subject(s)
Eprints ID
237192