What Drives Firms' Hiring Decisions? An Asset Pricing Perspective

• 成果类型: Article
• 署名作者: Belo, Frederico; Donangelo, Andres; Lin, Xiaoji; Luo, Ding
• 署名单位: INSEAD Business School; Centre for Economic Policy Research - UK; University of Minnesota System; University of Minnesota Twin Cities; City University of Hong Kong
• 刊物名称: REVIEW OF FINANCIAL STUDIES
• ISSN/ISSBN: 0893-9454
• DOI: 10.1093/rfs/hhad012
• 发表日期: 2023
• 页码: 3825
• 关键词: Return predictability; wage rigidity; stock-market; LABOR; INVESTMENT; prices; RISK; explanation; consumption; variance

摘要

We document that the aggregate hiring rate of publicly traded firms in the U.S. economy negatively predicts stock market returns and long-term cash flows, and positively predicts short-term cash flows. In addition, through a variance decomposition, we show that the time-series variation in the aggregate hiring rate is mainly driven by changes in discount rates and short-term expected cash flows, with no contribution from variation in long-term expected cash flows. We estimate a neoclassical dynamic model with labor market frictions and show that labor adjustment costs and time-varying risk are essential for the model to replicate the empirical patterns.