Personal Bankruptcy Laws and Corporate Policies
| Autor: | Hung-Chia Scott Hsu, Yi-Wen Chen, Chu-Bin Lin, Joseph T. Halford |
|---|---|
| Rok vydání: | 2019 |
| Předmět: |
Economics and Econometrics
050208 finance Leverage (finance) media_common.quotation_subject 05 social sciences Investment (macroeconomics) Affect (psychology) Shock (economics) Bargaining power Bankruptcy Accounting Law 0502 economics and business Business 050207 economics Risk taking Welfare Finance media_common |
| Zdroj: | Journal of Financial and Quantitative Analysis. 55:2397-2428 |
| ISSN: | 1756-6916 0022-1090 |
| DOI: | 10.1017/s0022109019000620 |
| Popis: | In this article we examine whether and how changes in personal bankruptcy laws, viewed as a shock to employees’ expected personal wealth, affect corporate policies. Following a reform in personal bankruptcy laws that limits individuals’ access to bankruptcy protection, firms more affected by this regulation reform increase labor costs, reduce investment, and engage in less risk taking. The effects are stronger when employees have more bargaining power. Furthermore, firms in industries characterized by high unemployment risk reduce leverage. These results support the view that firms choose more conservative policies to mitigate employees’ expected welfare losses. |
| Databáze: | OpenAIRE |
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