Inalienable Human Capital and Debt Choice: Evidence from Quasi-Exogenous Shocks

Sabri Boubaker (), Xiaoran Ni and David Yin
Additional contact information
Sabri Boubaker: Métis Lab EM Normandie - EM Normandie - École de Management de Normandie = EM Normandie Business School
Xiaoran Ni: Xiamen University
David Yin: University of Miami

Post-Print from HAL

Abstract: Motivated by Hart and Moore (1994)'s theoretical framework on inalienable human capital and debt contracting, we empirically investigate how firms adjust their debt structure in response to increased human capital mobility risk. Exploiting the staggered rejection of the inevitable disclosure doctrine (IDD), which potentially facilitates key talent outflows, we find that treated firms exhibit a statistically significant increase in private debt reliance relative to public debt. This result persists across various model specifications and is further corroborated by utilizing state-level noncompete enforceability as alternative proxies for changes in human capital mobility. Cross-sectional analysis suggests that the flexibility in renegotiation and enhanced monitoring associated with private debt provide crucial benefits in managing the heightened risk of human capital loss.

Keywords: Debt choice; Human capital; Labor mobility; Debt contracting; Private debt (search for similar items in EconPapers)
Date: 2023-06-26
References: Add references at CitEc
Citations:

Published in Asian Finance Conference, Asian Finance Association (AsianFA), Jun 2023, Ho Chi Minh City, Vietnam. ⟨10.2139/ssrn.3897481⟩

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

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:hal:journl:hal-04946045

DOI: 10.2139/ssrn.3897481

Access Statistics for this paper

More papers in Post-Print from HAL
Bibliographic data for series maintained by CCSD ().