Essays On Labor And Corporate Finance

Loading...
Thumbnail Image
Degree type
Doctor of Philosophy (PhD)
Graduate group
Finance
Discipline
Subject
Corporate finance
Entrepreneurship
Investment
Finance and Financial Management
Funder
Grant number
License
Copyright date
2018-02-23T20:17:00-08:00
Distributor
Related resources
Contributor
Abstract

This dissertation consists of two chapters that relate labor issues and corporate finance. In the first chapter, I investigate the impact of restricting labor mobility on two components of growth: entrepreneurship and capital investment. To identify the mechanism, I combine LinkedIn's database of employment histories with staggered changes in the enforceability of non-compete agreements that come mostly from state supreme court rulings. Stronger enforceability leads to a substantial decline in employee departures, especially in knowledge-intensive occupations, and reduces entrepreneurship in corresponding sectors. However, these shocks increase the investment rate at existing knowledge-intensive firms. I estimate a state of median size gains $50 million in capital investment from publicly-held knowledge-intensive firms, but loses almost 200 small firms entering knowledge-intensive sectors. In the second chapter, I explore a specific mechanism through which corporate social responsibility (CSR), and in particular pro-employee policies, may benefit companies. I propose that socially responsible behavior generates public goodwill toward the firm, which can be redeemed when the company needs public approval, such as when applying for public contracts. To provide causal support for this mechanism, I use the staggered state passage of Other Constituency (OC) laws, which allow directors to orient policies toward non-shareholder constituents. Following the passage of OC laws, employee safety and health measures systematically improve, indicating more employee-oriented behavior. At the same time, firms incorporated in these states systematically become more likely to obtain public contracts and obtain contracts of higher value.

Advisor
David K. Musto
Date of degree
2017-01-01
Date Range for Data Collection (Start Date)
Date Range for Data Collection (End Date)
Digital Object Identifier
Series name and number
Volume number
Issue number
Publisher
Publisher DOI
Journal Issue
Comments
Recommended citation