Capital Structure and Labour Demand: Investigations Using German Micro Data

Michael Funke, Wolf Maurer and Holger Strulik

Oxford Bulletin of Economics and Statistics, 1999, vol. 61, issue 2, 199-215

Abstract: The paper analyses the interaction between capital structure and employment decisions of firms. For this purpose, a theoretical model is developed in which a firm determines employment along an optimal path taking into account financial considerations. The empirical analysis using West German micro data proves that a negative relationship exists between employment and the debt asset ratio of the firm. We also demonstrate that as real wages (sales) increase, employment decreases (increases).

Date: 1999
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https://doi.org/10.1111/1468-0084.00125

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Working Paper: Capital Structure and Labour Demand: Investigations Using German Micro Data (1998)
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Persistent link: https://EconPapers.repec.org/RePEc:bla:obuest:v:61:y:1999:i:2:p:199-215

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