Questo sito utilizza cookies tecnici e di terze parti per funzionalità quali la condivisione sui social network e la raccolta di dati statistici in forma aggregata. Se non acconsenti all'utilizzo dei cookie di terze parti, alcune di queste funzionalità potrebbero essere non disponibili. Per maggiori informazioni consulta la cookie policy, continuando a navigare o cliccando su un qualsiasi elemento della pagina acconsentirai all’utilizzo dei cookie.

CSEF - Center for Studies in Economics and Finance

18 June 2017 – 0000
Corporate Leverage and Employees’ Rights in Bankruptcy

Corporate leverage responds differently to employees’ legal protection in bankruptcy depending on whether leverage is chosen to curtail workers’ bargaining power or is driven by credit constraints. Using newly collected cross-country data on employees’ rights in corporate bankruptcy, we estimate the impact of such rights on firms’ capital structure, applying triple-diff strategies that exploit time-series, cross-country and firm-level variation. The estimates show that leverage increases more substantially in response to rises in corporate property values or in profitability at firms where employees have strong seniority in liquidation and weak rights in restructuring, consistently with the strategic use of leverage.