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Leverage and Employee Death: Evidence from China’s Coalmining Industry

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  • Nie, Huihua
  • Zhao, Huainan

Abstract

China’s coalmining fatalities were 140 times higher than the U.S. in the last decade. To shed light on this issue, we form and examinea unique panel dataset of 25,387 firm-year observations for China’s coalmining industry. We show that a firm’s leverage significantly determines its coalmining fatality: A 10% increase in the debt ratio leads, on average, to a 3% increase in the number of death tolls. It suggests that reducing leverage in coalmining firms can be an effective way to curbemployee fatalities. Our study highlightsthe importance of corporate finance in helpingsolving social and institutional problems.

Suggested Citation

  • Nie, Huihua & Zhao, Huainan, 2013. "Leverage and Employee Death: Evidence from China’s Coalmining Industry," MPRA Paper 52343, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:52343
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    Cited by:

    1. Dai, Yunhao & Tong, Xinchu & Wang, Li, 2022. "Workplace safety accident, employee treatment, and firm value: Evidence from China," Economic Modelling, Elsevier, vol. 115(C).
    2. Hao, Ying & Li, Junyi & Ni, Juan & Yin, Ziqi, 2023. "Can military executives improve corporate performance? Evidence from industrial competitive pressure," Pacific-Basin Finance Journal, Elsevier, vol. 79(C).

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    More about this item

    Keywords

    Leverage; Debt; Capital Structure; Stakeholder Interest; Employee Death; CoalminingAccident;
    All these keywords.

    JEL classification:

    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • J81 - Labor and Demographic Economics - - Labor Standards - - - Working Conditions

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