 Effects of financial frictions on employment: Evidence from Japan during the Global Financial CrisisAkira Fukuda Journal of the Japanese and International Economies, 2022, vol. 65, issue C Abstract: This study examines the impact of a large credit shock on employment in Japan during the Global Financial Crisis in 2008–2009. To identify which firms faced a serious credit shock, we used variations in the long-term debt that must be repaid in the crisis. Because long-term debt takes more than one year to mature, it was determined independently of employment adjustments during the crisis. Therefore, using long-term debt maturing in a crisis, it is possible to identify the impact of exogenous tightening of the borrowing constraint on employment. We found that companies with a higher ratio of long-term debt maturing during the crisis had a greater negative impact on employment. In particular, the impact increased as the period passed from the shock, and this feature was most conspicuous in the group with the highest proportion of long-term debt maturing in the crisis. Keywords: Borrowing constraint; Labor adjustment; Global Financial Crisis (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:jjieco:v:65:y:2022:i:c:s0889158322000235 DOI: 10.1016/j.jjie.2022.101213 Access Statistics for this article Journal of the Japanese and International Economies is currently edited by Takeo Hoshi More articles in Journal of the Japanese and International Economies from Elsevier |
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