Competitive pressure and firm investment efficiency: Evidence from corporate employment decisions
研究发现产品市场竞争压力会扭曲企业雇佣决策效率，导致劳动投资不足，且这种效应在面临更高竞争威胁、财务约束、信息不对称和劳动调整成本的企业中更强。
Abstract This study examines the link between product market competition and labour investment efficiency. We find that competitive pressure distorts the efficiency of corporate employment decisions by creating an underinvestment problem. This finding withstands a battery of robustness checks and remains unchanged after accounting for endogeneity concerns. Additional analysis shows that the relationship between product market competition and labour investment efficiency is stronger for firms facing higher competitive threats, greater financial constraints, higher information asymmetry and higher labour adjustment costs. Our results suggest that as competition increases bankruptcy risk, it leads managers to underinvest in labour to avoid incurring labour‐related costs.