Labor Protection and Leverage
利用跨国就业保护的时间变化，发现劳动市场刚性显著影响企业资本结构决策：就业保护改革每加强，企业杠杆率平均下降187个基点，因为就业保护提高了经营杠杆，挤出了财务杠杆。
This paper exploits inter-temporal variations in employment protection across countries and finds that rigidities in labor markets are an important determinant of firms’ capital structure decisions. Over the 1985-2007 period, we find that reforms increasing employment protection are associated with a 187 basis point reduction in leverage. We interpret this finding to suggest that employment protection increases operating leverage, crowding out financial leverage. This result is robust across measures of employment protection and leverage, and does not appear to be due to pre-treatment differences between treated and control firms, omitted variables, unobserved changes in regional economic conditions, and reverse causality. Heterogeneous treatment effects are consistent with our economic intuition: we find that the negative effect is more pronounced in firms that are subject to frequent hiring and firing.