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Please use this identifier to cite or link to this item: https://dspace.lboro.ac.uk/2134/4632

Title: Do financial factors affect the Capital-Labour ratio? Evidence from UK firm-level data
Authors: Spaliara, Marina-Eliza
Keywords: Financial constraints
Firm-specific characteristics
Capital-Labour ratio
Issue Date: 2008
Publisher: © Loughborough University
Series/Report no.: Loughborough University. Department of Economics. Discussion Paper Series;WP 2008-02
Abstract: This paper investigates the nexus between financial factors and the capital-labour ratio using a rich firm-level data set. It is common in the literature to examine the impact of financial constraints on hiring and firing decisions separately from their impact on decisions related to investment in physical capital. We argue that as long as firms use both inputs in production and there is some substitutability between them, the two decisions need to be jointly analyzed. When we differentiate across firms that are more or less financially constrained, we find that the former group exhibits higher sensitivities of the capital-labour ratio to firm-specific characteristics, compared to the latter.
Description: This working paper is also available at: http://ideas.repec.org/p/lbo/lbowps/2008-02.html
Version: Published
URI: https://dspace.lboro.ac.uk/2134/4632
ISSN: 1750-4171
Appears in Collections:Working Papers (Economics)

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