Capital Structure and Labour Demand: Investigations Using German Micro Data

Michael Funke, Wolf Maurer and Holger Strulik

Quantitative Macroeconomics Working Papers from Hamburg University, Department of Economics

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).

Keywords: Labour Demand; Panel Data (search for similar items in EconPapers)
JEL-codes: C33 J23 (search for similar items in EconPapers)
Date: 1998-01
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Journal Article: Capital Structure and Labour Demand: Investigations Using German Micro Data (1999)
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Persistent link: https://EconPapers.repec.org/RePEc:ham:qmwops:19801

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