Caggese, Andrea and Cuñat, Vicente (2008) Financing constraints and fixed-term employment contracts. Economic Journal, 118 (533). pp. 2013-2046. ISSN 0013-0133
Abstract
This article studies the interactions between financing constraints and the employment decisions of firms when both fixed-term and permanent employment contracts are available. It develops the model of an industry where firms face financing frictions and produce output using both fixed-term and permanent workers. Once calibrated, the model shows that financially constrained firms use fixed-term workers more intensely and make them absorb a larger fraction of the total employment volatility than financially unconstrained firms do. We test and confirm the predictions of the model on a panel data of Italian manufacturing firms with detailed information about financing constraints and the type of workers employed by the firms.
| Item Type: | Article |
|---|---|
| Official URL: | http://www.blackwellpublishing.com/journal.asp?ref... |
| Additional Information: | © 2008 The Authors |
| Library of Congress subject classification: | H Social Sciences > HD Industries. Land use. Labor H Social Sciences > HG Finance |
| Sets: | Research centres and groups > Managerial Economics and Strategy Group Departments > Finance Research centres and groups > Financial Markets Group (FMG) |
| Date Deposited: | 08 Feb 2011 09:48 |
| URL: | http://eprints.lse.ac.uk/32240/ |
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