Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
5054340 | Economic Modelling | 2014 | 8 Pages |
Abstract
This paper aims at analyzing the impact of Employment Protection Legislation (EPL) on firms' investment policies in the contemporaneous presence of financial imperfections. Our results show that investment is significantly affected by the presence of both market imperfections; they are robust to alternative measures of EPL. Moreover, the effect of labor market regulation is weaker wherever financial market imperfections are smaller: firms with better access to financial markets are in a position to determine their optimal investment policy, even in the presence of stringent employment protection laws, than those facing financial constraints.
Related Topics
Social Sciences and Humanities
Economics, Econometrics and Finance
Economics and Econometrics
Authors
Giorgio Calcagnini, Annalisa Ferrando, Germana Giombini,