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| Author: | Bae, K-H. Kang, J-K. Wang, J. |
| Title: | Employee treatment and firm leverage: A test of the stakeholder theory of capital structure |
| Journal: | Journal of Financial Economics
2011 : APR, VOL. 100:1, p. 130-153 |
| Index terms: | capital structure of companies employees stakeholders theories |
| Freeterms: | firm leverage endogeneity |
| Language: | eng |
| Abstract: | Dealing with a firm's relations with its employees (henceforth as: empls.), this study examines the stakeholder theory of capital structure. Firms treating their empls. fairly are found to maintain low debt ratios. The negative relation btw. leverage and a firm's ability for treating empls. fairly is also evident when measuring its ability by whether it is included in the Fortune magazine list, "100 Best Companies to Work For". It is suggested that a firm's incentive/ability to offer fair empls. treatment is a key determinant of its financing policy. |
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