Leverage and Employee Death: Evidence from China’s Coalmining Industry

Huihua Nie and Huainan Zhao

MPRA Paper from University Library of Munich, Germany

Abstract: China’s coalmining fatalities were 140 times higher than the U.S. in the last decade. To shed light on this issue, we form and examinea unique panel dataset of 25,387 firm-year observations for China’s coalmining industry. We show that a firm’s leverage significantly determines its coalmining fatality: A 10% increase in the debt ratio leads, on average, to a 3% increase in the number of death tolls. It suggests that reducing leverage in coalmining firms can be an effective way to curbemployee fatalities. Our study highlightsthe importance of corporate finance in helpingsolving social and institutional problems.

Keywords: Leverage; Debt; Capital Structure; Stakeholder Interest; Employee Death; CoalminingAccident (search for similar items in EconPapers)
JEL-codes: G30 G32 J81 (search for similar items in EconPapers)
Date: 2013-12-18
New Economics Papers: this item is included in nep-tra
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Citations: View citations in EconPapers (2)

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