Employee treatment and firm leverage: A test of the stakeholder theory of capital structure

• 成果类型: Article
• 署名作者: Bae, Kee-Hong; Kang, Jun-Koo; Wang, Jin
• 署名单位: Nanyang Technological University; York University - Canada; Wilfrid Laurier University
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/j.jfineco.2010.10.019
• 发表日期: 2011
• 页码: 130-153
• 关键词: capital structure; Employee treatment; stakeholder; KLD rating; endogeneity

摘要

We investigate the stakeholder theory of capital structure from the perspective of a firm's relations with its employees. We find that firms that treat their employees fairly (as measured by high employeefriendly ratings) maintain low debt ratios. This result is robust to a variety of model specifications and endogeneity issues. The negative relation between leverage and a firm's ability to treat employees fairly is also evident when we measure its ability by whether it is included in the Fortune magazine list, 100 Best Companies to Work For. These results suggest that a firm's incentive or ability to offer fair employee treatment is an important determinant of its financing policy. (C) 2010 Elsevier B.V. All rights reserved,