Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/82831
Authors: 
Bergström, Pål
Lindberg, Sara
Year of Publication: 
1998
Series/Report no.: 
Working Paper, Department of Economics, Uppsala University 1998:18
Abstract: 
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.
Subjects: 
Employment Determination
Financial Policy
Panel Data
JEL: 
D92
G32
J23
Document Type: 
Working Paper

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