Semantic Scholar Open Access 2013 475 sitasi

Labor Unemployment Risk and Corporate Financing Decisions

Ashwini Agrawal David A. Matsa

Lihat Sumber DOI

Abstrak

This paper presents evidence that firms choose conservative financial policies partly to mitigate workers' exposure to unemployment risk. We exploit changes in state unemployment insurance laws as a source of variation in the costs borne by workers during layoff spells. We find that higher unemployment benefits lead to increased corporate leverage, particularly for labor-intensive and financially constrained firms. We estimate the ex ante, indirect costs of financial distress due to unemployment risk to be about 60 basis points of firm value for a typical BBB-rated firm. The findings suggest that labor market frictions have a significant impact on corporate financing decisions.

Topik & Kata Kunci

Economics

Penulis (2)

Ashwini Agrawal

David A. Matsa

Format Sitasi

APA MLA BibTeX

Agrawal, A., Matsa, D.A. (2013). Labor Unemployment Risk and Corporate Financing Decisions. https://doi.org/10.1016/J.JFINECO.2012.11.006

Akses Cepat

Lihat di Sumber doi.org/10.1016/J.JFINECO.2012.11.006

Informasi Jurnal

Tahun Terbit: 2013
Bahasa: en
Total Sitasi: 475×
Sumber Database: Semantic Scholar
DOI: 10.1016/J.JFINECO.2012.11.006
Akses: Open Access ✓