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Financial constraints and employee satisfaction

Author

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  • Jing, Chenxing
  • Keasey, Kevin
  • Lim, Ivan
  • Xu, Bin

Abstract

Using over 120,000 employee reviews collected by Glassdoor between 2008 and 2015, we investigate whether firm financial constraints reduce employee satisfaction. We find that employee satisfaction is substantially lower in financially constrained firms. Decomposing employee ratings, we find that firm financial constraints are associated with employees’ concerns regarding work–life balance, senior leadership, and career progression. Our study implies that employee satisfaction could be an important channel through which financial constraints reduce firm value.

Suggested Citation

  • Jing, Chenxing & Keasey, Kevin & Lim, Ivan & Xu, Bin, 2019. "Financial constraints and employee satisfaction," Economics Letters, Elsevier, vol. 183(C), pages 1-1.
    • Handle: RePEc:eee:ecolet:v:183:y:2019:i:c:13
    DOI: 10.1016/j.econlet.2019.108599
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    References listed on IDEAS

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    Cited by:

    1. Kim, Jonghwan (Simon) & Ra, Kyeongheum, 2022. "Employee satisfaction and asymmetric cost behavior: Evidence from Glassdoor," Economics Letters, Elsevier, vol. 219(C).
    2. Laura Neumeyer & Anna Gründler & Anna-Luisa Stöber, 2023. "Don’t Worry, Be Happy—Does the CEO’s Personality Mitigate the Negative Effect of Financial Constraints on Employee Satisfaction?," Schmalenbach Journal of Business Research, Springer, vol. 75(1), pages 71-98, March.
    3. Kweh, Qian Long & Tebourbi, Imen & Lo, Huai-Chun & Huang, Cheng-Tsu, 2022. "CEO compensation and firm performance: Evidence from financially constrained firms," Research in International Business and Finance, Elsevier, vol. 61(C).
    4. Kim, Jonghwan (Simon) & Jeon, Heung-Jae & Kim, Grace Goun, 2022. "Overconfidence or competence? Your employees know," Economics Letters, Elsevier, vol. 216(C).
    5. Fuzhong Chen & Guohai Jiang, 2022. "The Roles of FinTech with Perceived Mediators in Consumer Financial Satisfaction with Cashless Payments," Mathematics, MDPI, vol. 10(19), pages 1-21, September.

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    More about this item

    Keywords

    Financial constraints; Employee satisfaction;

    JEL classification:

    • G3 - Financial Economics - - Corporate Finance and Governance
    • J2 - Labor and Demographic Economics - - Demand and Supply of Labor

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