Rights statement: This is a pre-copy-editing, author-produced PDF of an article accepted for publication in The Review of Financial Studies following peer review. The definitive publisher-authenticated version Mohamed Ghaly, Viet Anh Dang, Konstantinos Stathopoulos; Cash Holdings and Labor Heterogeneity: The Role of Skilled Labor, The Review of Financial Studies, Volume 30, Issue 10, 1 October 2017, Pages 3636–3668, https://doi.org/10.1093/rfs/hhx045 is available online at: https://academic.oup.com/rfs/article/3835431/Cash-Holdings-and-Labor-Heterogeneity-The-Role-of
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Final published version
Research output: Contribution to Journal/Magazine › Journal article › peer-review
Research output: Contribution to Journal/Magazine › Journal article › peer-review
}
TY - JOUR
T1 - Cash holdings and labor heterogeneity
T2 - the role of skilled labor
AU - Ghaly, Mohamed
AU - Anh Dang, Viet
AU - Stathopoulos, Konstantinos
N1 - This is a pre-copy-editing, author-produced PDF of an article accepted for publication in The Review of Financial Studies following peer review. The definitive publisher-authenticated version Mohamed Ghaly, Viet Anh Dang, Konstantinos Stathopoulos; Cash Holdings and Labor Heterogeneity: The Role of Skilled Labor, The Review of Financial Studies, Volume 30, Issue 10, 1 October 2017, Pages 3636–3668, https://doi.org/10.1093/rfs/hhx045 is available online at: https://academic.oup.com/rfs/article/3835431/Cash-Holdings-and-Labor-Heterogeneity-The-Role-of
PY - 2017/10
Y1 - 2017/10
N2 - Firms differ in their dependence on skilled labor, and face labor adjustment costs that increase with their workers’ skill level. We show that firms with a higher share of skilled workers, and thus less flexibility to adjust their labor demand in response to cash flow shocks, hold more precautionary cash. The effect of labor skills on cash holdings is more pronounced for financially constrained firms and varies with exogenous differences in firing and hiring costs. We address endogeneity concerns by using subsamples of firms with reasonably similar characteristics, propensity score matching, and a quasi-experimental shock to labor markets.
AB - Firms differ in their dependence on skilled labor, and face labor adjustment costs that increase with their workers’ skill level. We show that firms with a higher share of skilled workers, and thus less flexibility to adjust their labor demand in response to cash flow shocks, hold more precautionary cash. The effect of labor skills on cash holdings is more pronounced for financially constrained firms and varies with exogenous differences in firing and hiring costs. We address endogeneity concerns by using subsamples of firms with reasonably similar characteristics, propensity score matching, and a quasi-experimental shock to labor markets.
KW - Cash Holdings
KW - Skilled Labor
KW - Labor Adjustment Costs
KW - Hiring Costs
KW - Firing Costs
KW - Labor Heterogeneity
U2 - 10.1093/rfs/hhx045
DO - 10.1093/rfs/hhx045
M3 - Journal article
VL - 30
SP - 3636
EP - 3668
JO - Review of Financial Studies
JF - Review of Financial Studies
SN - 0893-9454
IS - 10
ER -