Firms' Financial Policy and Labour Demand: Theory and Evidence
AbstractThis paper investigates the influence of financial leverage on firms' intertemporal hiring decisions in the context of the hierarchy of finance approach to coporate finance. We derive the Euler equation of employment in the presence of convex adjustment costs, and show the empirical implications of firms facing a hierarchy of financial costs. A linearised version of the model is estimated on a large panel of Swedish manufacturing firms over the period 1979-88.
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Bibliographic InfoPaper provided by Uppsala - Working Paper Series in its series Papers with number 1998:18.
Length: 30 pages
Date of creation: 1998
Date of revision:
Contact details of provider:
Postal: UPPSALA UNIVERSITY, DEPARTMENT OF ECONOMICS, S-751 20 UPPSALA SWEDEN.
Phone: + 46 18 471 25 00
Fax: + 46 18 471 14 78
Web page: http://www.nek.uu.se/
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LABOUR MARKET ; BUSINESS FINANCING ; BUSINESS CYCLES;
Find related papers by JEL classification:
- J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
- G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
- D92 - Microeconomics - - Intertemporal Choice and Growth - - - Intertemporal Firm Choice and Growth, Financing, Investment, and Capacity
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- le Grand, Carl, 2000. "On-the-job training, firm resources and unemployment risks: an analysis of the Swedish recession 1991-1993," Working Paper Series 2000:3, IFAU - Institute for Evaluation of Labour Market and Education Policy.
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