Corporate Cash and Employment

• 成果类型: Article
• 署名作者: Bacchetta, Philippe; Benhima, Kenza; Poilly, Celine
• 署名单位: University of Lausanne; University of Lausanne; Swiss Finance Institute (SFI); University of Lausanne; Institut de Recherche pour le Developpement (IRD); Aix-Marseille Universite; Centre National de la Recherche Scientifique (CNRS)
• 刊物名称: AMERICAN ECONOMIC JOURNAL-MACROECONOMICS
• ISSN/ISSBN: 1945-7707
• DOI: 10.1257/mac.20150191
• 发表日期: 2019
• 页码: 30-66
• 关键词: monetary-policy; labor-markets; credit; debt; volatility; INVESTMENT; management; finance

摘要

In the aftermath of the US financial crisis, both a sharp drop in employment and a surge in corporate cash have been observed. In this paper, based on US data, we argue that the negative relationship between the corporate cash ratio and employment is systematic, both over time and across firms. We develop a dynamic general equilibrium model where heterogenous firms need cash and external liquid funds in their production process. We analyze the dynamic impact of aggregate shocks and the cross-firm impact of idiosyncratic shocks. We show that external liquidity shocks generate a negative comovement between the cash ratio and employment, as documented in the data.