An analysis of the length of labour and financial contracts: a study for Spain
This study investigates the connection between the duration of financial contracts and that of labour contracts. Workers with long-term contracts have incentives to invest in training. This makes them attractive to the entrepreneur. Furthermore, this behaviour will be reinforced if financial contracts are long-term, because it reduces the probability of an early liquidation as well as the dismissal of trained workers. As a conclusion, significant increases in the length of financing contracts should be accompanied by corresponding increases in the length of labour contracts. Support for this theoretical contention is found by testing it on a dataset composed of Spanish manufacturing firms for the period 1991-2000.
Volume (Year): 37 (2005)
Issue (Month): 8 ()
|Contact details of provider:|| Web page: http://www.tandfonline.com/RAEC20|
|Order Information:||Web: http://www.tandfonline.com/pricing/journal/RAEC20|
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Sharpe, Steven A, 1994.
"Financial Market Imperfections, Firm Leverage, and the Cyclicality of Employment,"
American Economic Review,
American Economic Association, vol. 84(4), pages 1060-74, September.
- Steven A. Sharpe, 1993. "Financial market imperfections, firm leverage and the cyclicality of employment," Finance and Economics Discussion Series 93-10, Board of Governors of the Federal Reserve System (U.S.).
- Kevin J. Murphy, 1992. "Determinants of Contract Duration in Collective Bargaining Agreements," ILR Review, Cornell University, ILR School, vol. 45(2), pages 352-365, January.
- Sharpe, Steven A, 1990.
" Asymmetric Information, Bank Lending, and Implicit Contracts: A Stylized Model of Customer Relationships,"
Journal of Finance,
American Finance Association, vol. 45(4), pages 1069-87, September.
- Steven A. Sharpe, 1989. "Asymmetric information, bank lending, and implicit contracts: a stylized model of customer relationships," Finance and Economics Discussion Series 70, Board of Governors of the Federal Reserve System (U.S.).
- Gray, Jo Anna, 1978. "On Indexation and Contract Length," Journal of Political Economy, University of Chicago Press, vol. 86(1), pages 1-18, February.
- Rafael Llorca Vivero, 2002. "The impact of process innovations on firm's productivity growth: the case of Spain," Applied Economics, Taylor & Francis Journals, vol. 34(8), pages 1007-1016.
- Pagano, Marco & Volpin, Paolo, 2002.
"Managers, Workers and Corporate Control,"
CEPR Discussion Papers
3649, C.E.P.R. Discussion Papers.
- Silvio Rendón, 2000.
"Job creation under liquidity constraints: The Spanish case,"
Economics Working Papers
488, Department of Economics and Business, Universitat Pompeu Fabra.
- Silvio Rendón, 2001. "Job Creation under Liquidity Constraints: the Spanish Case," Working Papers 0101, Banco de España;Working Papers Homepage.
- Rosario Sanchez & Luis Toharia, 2000. "Temporary workers and productivity: the case of Spain," Applied Economics, Taylor & Francis Journals, vol. 32(5), pages 583-591.
- Esther Del Brio & Alberto De Miguel & Julio Pindado, 2003. "Investment and firm value: an analysis using panel data," Applied Financial Economics, Taylor & Francis Journals, vol. 13(12), pages 913-923.
- Barcena-Ruiz, Juan Carlos & Campo, Maria Luz, 2000. "Short-term or long-term labor contracts," Labour Economics, Elsevier, vol. 7(3), pages 249-260, May.
- Luis Ayala & Rosa Martinez & Jesus Ruiz-Huerta, 2002. "Institutional determinants of the unemployment-earnings inequality trade-off," Applied Economics, Taylor & Francis Journals, vol. 34(2), pages 179-195.
- Murphy, Kevin J., 2000. "What effect does uncertainty have on the length of labor contracts?," Labour Economics, Elsevier, vol. 7(2), pages 181-201, March.
- Christopher Ragan, 1995. "A Risk-Sharing View of Real Wages and Contract Length," Canadian Journal of Economics, Canadian Economics Association, vol. 28(4b), pages 1161-79, November.
- Garvey, Gerald T. & Swan, Peter L., 1992. "The interaction between financial and employment contracts: A formal model of Japanese Corporate Governance," Journal of the Japanese and International Economies, Elsevier, vol. 6(3), pages 247-274, September.
- Tsoulouhas, Theofanis, 1999. "Renegotiation-Proof Labour and Credit Contracts with Worker Mobility," Economica, London School of Economics and Political Science, vol. 66(264), pages 433-54, November.
- Martin, Richard, 2003. "Debt financing and entry," International Journal of Industrial Organization, Elsevier, vol. 21(4), pages 533-549, April.
- Osano, Hiroshi, 1997. "An Evolutionary Model of Corporate Governance and Employment Contracts," Journal of the Japanese and International Economies, Elsevier, vol. 11(3), pages 403-436, September.
When requesting a correction, please mention this item's handle: RePEc:taf:applec:v:37:y:2005:i:8:p:905-916. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Michael McNulty)
If references are entirely missing, you can add them using this form.