Leverage, imports, profitability, exchange rates, and capital investment: A panel data study of the textile and apparel industries 1974-1987

Richard A. Lord, James E. McIntyre

Research output: Contribution to journalArticle

8 Scopus citations


This paper explores the relationship between capital structure and import competition for the textile and apparel industries from 1974-1987. The level of import penetration should have an important effect on business risk and hence on financial leverage. We also examine the response of leverage to the interrelationships that may exist between import competition and three other factors: firm profitability, strength of the dollar, and investment in capital equipment.The evidence suggests that leverage for the textile firms increases with rising imports but that the effect is less marked if the imports are the result of a strengthening dollar. The textile firms also seem to have inaugurated a capital investment campaign in reaction to import competition. For apparel firms, the interrelationship between profitability and import penetration seems to have been the primary determinant of leverage.

Original languageEnglish
Pages (from-to)287-310
Number of pages24
JournalInternational Review of Financial Analysis
Issue number3
StatePublished - 1 Jan 2003



  • Business risk
  • Capital structure
  • Foreign exchange
  • Imports

Cite this