EconPapers    
Economics at your fingertips  
 

Labor Contracts, Wages and SME Failure

Nico Dewaelheyns, Cynthia Van Hulle (), Yannick Van Landuyt () and Mathias Verreydt ()
Additional contact information
Cynthia Van Hulle: Department of Accountancy, Finance & Insurance, Faculty of Economics and Business, KU Leuven, 3000 Leuven, Belgium
Yannick Van Landuyt: National Bank of Belgium, 1000 Brussels, Belgium
Mathias Verreydt: Department of Financial Management, Faculty of Economics and Business, KU Leuven, 2000 Antwerp, Belgium

Sustainability, 2021, vol. 13, issue 14, 1-15

Abstract: Although employment protection and employee remuneration has been shown to affect many aspects of a firm’s performance, evidence of their ability to explain firm failure is very limited. This paper examines the effect of different types of labor contracts and wages on the probability of corporate failure between 2012 and 2019 using a sample of 29,596 Belgian SMEs. Using discrete time hazard regression models, we find that the use of contract types with lower employment protection and paying lower wages are significant predictors of failure.

Keywords: bankruptcy prediction; employment protection; human capital; hazard models (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
https://www.mdpi.com/2071-1050/13/14/7864/pdf (application/pdf)
https://www.mdpi.com/2071-1050/13/14/7864/ (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:gam:jsusta:v:13:y:2021:i:14:p:7864-:d:594067

Access Statistics for this article

Sustainability is currently edited by Mr. Samuel Li

More articles in Sustainability from MDPI
Bibliographic data for series maintained by MDPI Indexing Manager ().

 
Page updated 2023-01-17
Handle: RePEc:gam:jsusta:v:13:y:2021:i:14:p:7864-:d:594067