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Does employee welfare affect corporate debt maturity?

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  • Boubaker, Sabri
  • Chourou, Lamia
  • Haddar, Marwa
  • Hamza, Taher

Abstract

This study examines the effect of employee well-being on the corporate debt maturity structure of U.S. firms. It hypothesizes that a firm's degree of commitment to employee welfare affects its debt maturity structure. Using a sample of 19,347 firm-year observations over the period 1991–2014, we find evidence that firms with higher employee welfare scores prefer long-term debt over short-term debt. This relationship is more pronounced for firms operating in human-capital-intensive industries and firms with lower labor union-membership rate. Our findings are robust to endogeneity concerns and insensitive to the use of alternative regression methods, variable measurements, and sample compositions. This paper provides novel evidence on the role of employment policies and practices in explaining variations in debt maturity.

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  • Boubaker, Sabri & Chourou, Lamia & Haddar, Marwa & Hamza, Taher, 2019. "Does employee welfare affect corporate debt maturity?," European Management Journal, Elsevier, vol. 37(5), pages 674-686.
    • Handle: RePEc:eee:eurman:v:37:y:2019:i:5:p:674-686
    DOI: 10.1016/j.emj.2019.08.004
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    More about this item

    Keywords

    Employee well-being; Employee welfare; Stakeholders; Debt maturity;
    All these keywords.

    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • M54 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Labor Management

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