Do Cash Windfalls Affect Wages? Evidence from R&D Grants to Small Firms

• 成果类型: Article
• 署名作者: Howell, Sabrina T.; Brown, J. David
• 署名单位: National Bureau of Economic Research; IZA Institute Labor Economics
• 刊物名称: REVIEW OF FINANCIAL STUDIES
• ISSN/ISSBN: 0893-9454
• DOI: 10.1093/rfs/hhac076
• 发表日期: 2023
• 页码: 1889
• 关键词: capital structure; group-size; INVESTMENT; INEQUALITY; regression; insurance; fairness; creation; profits; constraints

摘要

This paper examines how employee earnings respond to a one-time cash flow shock in the form of a government R&D grant. In a regression discontinuity design. we find that the grant immediately increases average annual employee-level earnings by 2.9%. This benefit accrues only to incumbent employees and rises with job tenure. The grant also affects firm growth, but the initial wage patterns do not appear to reflect growth or productivity. Instead, the evidence supports implicit equity financing within the firm, where employees initially accept lower wages from financially constrained firms and earn more when the firm has ability to pay.