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News
May 18, 2026
The 'Second Shift' Is Not Why Women Avoid News
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Labour market conditions and the corporate financing decision: A European analysis

Research in International Business and Finance. 2021. Vol. 58. Article 101431.
Lopez Iturriaga F. J., Vega-Gutierrez P. L., Rodriguez-Sanz J. A.

This study examines the influence of labour market conditions on corporate capital structure in a sample of 2892 firms from France, Germany, Italy, Spain, and the UK. After considering the effect of unemployment and inflation, we analyse the impact of two market imperfections: employees’ rights and downward wage rigidity. Results indicate that financial leverage responds to changes in unemployment and inflation. We also find that the influence of employees’ rights is non-linear, whereas the negative effect of downward wage rigidity is moderated by firms’ market power. Taken together, our results show that corporate financial decisions are conditioned not only by firm-level issues but also by a country’s labour market.

Research target: Economics and Management
Language: English
DOI
Text on another site
Keywords: labour marketunemploymentcapital structure Inflationemployees' rightswage rigidity
Publication based on the results of:
Исследования цифровых инноваций и организационных изменений в компаниях (2021)
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