Authors: Marios Sotiropoulos, Petros Kalantonis

Title: The effect of leverage on firms' profitability: The case of Greek listed firms in the period of Capital Controls

Abstract

Financial leverage effect on profitability is trending topic examined by the literature for different markets around the globe. In Europe, following of the European Sovereign Debt Crisis (2008-2012), profitability was put on test, and the effect of financial leverage has been a key question for research.

Previous literature approached the topic with data collected mainly from National and International Stock Exchanges, then they statistically analyzed and discussed their results, using the regression models in order to measure the effect of leverage on firm financial performance, which in most cases was addressed by profitability ratios.

Guided by previous literature, we examined the effect of financial leverage on profitability, for 144 listed companies for the period before and during the financial crisis.