Conflicts of Interest, Employment Decisions, and Debt Restructuring: Evidence from Spanish Firms in Financial Distress

A.J. Padilla and A. Requejo

Working Papers from Centro de Estudios Monetarios Y Financieros-

Abstract: We examine the employment decisions of Spanish manufacturing firms in financial distress. Our sample comprises 4,566 firms operating during 1983-1994. We find that firms in distress reduce their employment significantly. These reductions are positively associated with asset sales, but cannot be fully explained by them. They are also negatively related to firm size and to firing costs. Our main finding, however, is that firms that restructure their debt in response to distress are more likely to reduce their employment.

Keywords: BANKS; DEBT; BUSINESS FINANCING; EMPLOYMENT (search for similar items in EconPapers)
JEL-codes: G21 G32 G33 J21 (search for similar items in EconPapers)
Pages: 41 pages
Date: 1999
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:fth:cemfdt:9910

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