Labor investment efficiency and credit ratings

Ahsan Habib and Dinithi Ranasinghe

Finance Research Letters, 2022, vol. 48, issue C

Abstract: We examine the relationship between labor investment efficiency and credit ratings. Using a sample of U.S. firm spanning the period 1987 to 2016, we document that inefficient labor investment decreases firm credit ratings. Our results remain robust to possible endogeneity concerns. We also document that financial distress, earnings volatility, and firm life cycle moderate the relationship between inefficient labor investments and credit ratings.

Keywords: Labor investment efficiency; Credit ratings; Financial distress; Corporate governance (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:48:y:2022:i:c:s154461232200191x

DOI: 10.1016/j.frl.2022.102924

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