Personal Bankruptcy Laws and Corporate Policies
In this article we examine whether and how changes in personal bankruptcy laws, viewed as a shock to employees’ expected personal wealth, affect corporate policies. Following a reform in personal bankruptcy laws that limits individuals’ access to bankruptcy protection, firms more affected by this re...
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| Veröffentlicht in: | Journal of financial and quantitative analysis 2020-11, Vol.55 (7), p.2397-2428 |
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| container_end_page | 2428 |
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| container_issue | 7 |
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| container_title | Journal of financial and quantitative analysis |
| container_volume | 55 |
| creator | Chen, Yi-Wen Halford, Joseph T. Hsu, Hung-Chia Scott Lin, Chu-Bin |
| description | In this article we examine whether and how changes in personal bankruptcy laws, viewed as a shock to employees’ expected personal wealth, affect corporate policies. Following a reform in personal bankruptcy laws that limits individuals’ access to bankruptcy protection, firms more affected by this regulation reform increase labor costs, reduce investment, and engage in less risk taking. The effects are stronger when employees have more bargaining power. Furthermore, firms in industries characterized by high unemployment risk reduce leverage. These results support the view that firms choose more conservative policies to mitigate employees’ expected welfare losses. |
| doi_str_mv | 10.1017/S0022109019000620 |
| format | Article |
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Following a reform in personal bankruptcy laws that limits individuals’ access to bankruptcy protection, firms more affected by this regulation reform increase labor costs, reduce investment, and engage in less risk taking. The effects are stronger when employees have more bargaining power. Furthermore, firms in industries characterized by high unemployment risk reduce leverage. 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Foster School of Business, University of Washington 2019</rights><rights>COPYRIGHT 2019, MICHAEL G. 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Financ. Quant. Anal</addtitle><description>In this article we examine whether and how changes in personal bankruptcy laws, viewed as a shock to employees’ expected personal wealth, affect corporate policies. Following a reform in personal bankruptcy laws that limits individuals’ access to bankruptcy protection, firms more affected by this regulation reform increase labor costs, reduce investment, and engage in less risk taking. The effects are stronger when employees have more bargaining power. Furthermore, firms in industries characterized by high unemployment risk reduce leverage. These results support the view that firms choose more conservative policies to mitigate employees’ expected welfare losses.</description><subject>Bankruptcy</subject><subject>Bankruptcy laws</subject><subject>Bargaining</subject><subject>Companies</subject><subject>Cost control</subject><subject>Debt cancellation</subject><subject>Debt service</subject><subject>Employees</subject><subject>Human capital</subject><subject>Humankapital</subject><subject>Hypotheses</subject><subject>Insolvenz</subject><subject>Investment</subject><subject>Investments</subject><subject>Labor costs</subject><subject>Macroeconomics</subject><subject>Management</subject><subject>Personal bankruptcy</subject><subject>Private Verschuldung</subject><subject>Quantitative analysis</subject><subject>Risk reduction</subject><subject>Risk taking</subject><subject>Unemployment</subject><subject>USA</subject><subject>Vermögen</subject><subject>Wealth</subject><subject>Welfare</subject><issn>0022-1090</issn><issn>1756-6916</issn><fulltext>true</fulltext><rsrctype>article</rsrctype><creationdate>2020</creationdate><recordtype>article</recordtype><sourceid>BENPR</sourceid><recordid>eNp9kM1LAzEQxYMoWKt_gAdhwfPaycdOkqMWv6BgQT0v2WxWtrabmmyR_vemrNiD6Glg3u_NPB4h5xSuKFA5eQZgjIIGqgEAGRyQEZUF5qgpHpLRTs53-jE5iXGRmLSAEZnMXYi-M8vsxnTvYbPu7Tabmc-Yma7Opj6sfTC9y-Z-2drWxVNy1JhldGffc0xe725fpg_57On-cXo9y60oZJ8z4zTnlXUVKsorV6NprJJGSzBSqloXTYPcNRx5URTILDDOhEItlGVMaD4ml8PddfAfGxf7cuE3IeWMJZMcUGjE_ymBgkoEpRJFB8oGH2NwTbkO7cqEbUmh3LVX_movebLB46zv2rh3SK5A0UIWCbkYkEXsffghGKZogvGk8--3ZlWFtn5z-3R_P_4CeU-Bmw</recordid><startdate>20201101</startdate><enddate>20201101</enddate><creator>Chen, Yi-Wen</creator><creator>Halford, Joseph T.</creator><creator>Hsu, Hung-Chia Scott</creator><creator>Lin, Chu-Bin</creator><general>Cambridge University Press</general><scope>OQ6</scope><scope>AAYXX</scope><scope>CITATION</scope><scope>8BJ</scope><scope>FQK</scope><scope>JBE</scope><scope>3V.</scope><scope>7WY</scope><scope>7WZ</scope><scope>7X1</scope><scope>7XB</scope><scope>87Z</scope><scope>8A9</scope><scope>8FK</scope><scope>8FL</scope><scope>ABUWG</scope><scope>AFKRA</scope><scope>ANIOZ</scope><scope>BENPR</scope><scope>BEZIV</scope><scope>CCPQU</scope><scope>DWQXO</scope><scope>FRAZJ</scope><scope>FRNLG</scope><scope>F~G</scope><scope>K60</scope><scope>K6~</scope><scope>L.-</scope><scope>M0C</scope><scope>PQBIZ</scope><scope>PQBZA</scope><scope>PQEST</scope><scope>PQQKQ</scope><scope>PQUKI</scope><scope>Q9U</scope><scope>S0X</scope><orcidid>https://orcid.org/0000-0001-7463-9227</orcidid></search><sort><creationdate>20201101</creationdate><title>Personal Bankruptcy Laws and Corporate Policies</title><author>Chen, Yi-Wen ; 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| identifier | ISSN: 0022-1090 |
| ispartof | Journal of financial and quantitative analysis, 2020-11, Vol.55 (7), p.2397-2428 |
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| language | eng |
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| source | Cambridge University Press Journals Complete; EBSCOhost Business Source Complete |
| subjects | Bankruptcy Bankruptcy laws Bargaining Companies Cost control Debt cancellation Debt service Employees Human capital Humankapital Hypotheses Insolvenz Investment Investments Labor costs Macroeconomics Management Personal bankruptcy Private Verschuldung Quantitative analysis Risk reduction Risk taking Unemployment USA Vermögen Wealth Welfare |
| title | Personal Bankruptcy Laws and Corporate Policies |
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