Firms' financial policy and labour demand : theory and evidence

• We investigate the influence of financial leverage on firms' hiring decisions in the context of a hierarchy of finance model. The analysis is based on the Euler equation of employment in the presence of convex adjustment costs. We show the empirical implications of firms facing a hierarchy of financial costs, and estimate a linearised version of the model on a large panel of Swedish manufacturing firms. Bootstrap methods are utilised to alleviate some of the estimation problems involved. The empirical findings indicate that the influence of financial leverage on firms' hiring decisions differs significantly between firms in different financial regimes.

Ämnesord

SAMHÄLLSVETENSKAP  -- Ekonomi och näringsliv -- Nationalekonomi (hsv//swe)

SOCIAL SCIENCES  -- Economics and Business -- Economics (hsv//eng)

Nyckelord

Economics

Nationalekonomi

Economics

Nationalekonomi

Publikations- och innehållstyp

vet (ämneskategori)

rap (ämneskategori)