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Corporate Hiring under Uncertainty

Author

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  • Duc Duy Nguyen
  • Vathunyoo Sila

Abstract

Using granular data on job postings and employee flows, we examine how firms adjust human capital investments during periods of uncertainty brought on by gubernatorial elections. We find that firms reduce job postings in the 6 months leading up to an election, particularly advertisements for more costly to reverse positions (highly skilled, less flexible, or unionized). We also explore the sources of election uncertainty and find stronger effects in elections where public interests more heavily focus on labor issues. Our results are consistent with the real options framework, where firms adopt a “wait and see” approach in response to uncertainty. (JEL J2, G3)

Suggested Citation

  • Duc Duy Nguyen & Vathunyoo Sila, 2025. "Corporate Hiring under Uncertainty," The Review of Corporate Finance Studies, Society for Financial Studies, vol. 14(4), pages 949-988.
    • Handle: RePEc:oup:rcorpf:v:14:y:2025:i:4:p:949-988.
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    File URL: http://hdl.handle.net/10.1093/rcfs/cfaf008
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    More about this item

    JEL classification:

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

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