Firm-level political risk and labor performance

Svetlana Orlova and Li Sun

International Review of Financial Analysis, 2024, vol. 96, issue PB

Abstract: This study examines how firm-level political risk relates to labor performance, measured as the ratio of the total of net income and labor cost to the number of employees. Using a sample of 9508 firm-year observations consisting of U.S. firms during the years 2002–2021, we find a significant and negative relation between political risk and labor performance. Our empirical tests show that after controlling for other factors, firms facing a higher level of political risk demonstrate lower labor performance, highlighting the negative impact of political risk on firm behavior and outcomes.

Keywords: Political risks; Labor performance; Labor efficiency; Labor cost (search for similar items in EconPapers)
JEL-codes: G30 G33 G39 M14 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finana:v:96:y:2024:i:pb:s105752192400629x

DOI: 10.1016/j.irfa.2024.103697

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