Corporate cash and employment
Philippe Bacchetta; Kenza Benhima; Céline Poilly
In the aftermath of the US financial crisis, both a sharp drop in employment and a surge in corporate cash have been observed. In this paper, based on US data, we document that the negative relationship between the corporate cash ratio and employment is systematic, both over time and across firms. We develop a dynamic general equilibrium model where heterogenous firms need cash in their production process and where financial shocks are made of both credit and liquidity shocks. We show that external liquidity shocks generate a negative comovement between the cash ratio and employment. We analyze the dynamic impact of aggregate shocks and the cross-firm impact of idiosyncratic shocks. With a calibrated version of the model, the model yields a negative comovement that is close to the data.
Year of publication: |
2014
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Authors: | Bacchetta, Philippe ; Benhima, Kenza ; Poilly, Céline |
Publisher: |
Lausanne : Univ. de Lausanne, DEEP |
Subject: | Finanzkrise | Financial crisis | Schock | Shock | Betriebliche Liquidität | Corporate liquidity | Beschäftigungseffekt | Employment effect | Dynamisches Gleichgewicht | Dynamic equilibrium | Theorie | Theory |
Saved in:
freely available
Extent: | Online-Ressource (PDF-Datei: 48 S.) graph. Darst. |
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Series: | Cahiers de recherches économiques. - Lausanne : HEC, ZDB-ID 2273796-0. - Vol. 14,09 |
Type of publication: | Book / Working Paper |
Type of publication (narrower categories): | Arbeitspapier ; Working Paper ; Graue Literatur ; Non-commercial literature |
Language: | English |
Notes: | Systemvoraussetzungen: PDF-Reader |
Source: | ECONIS - Online Catalogue of the ZBW |
Persistent link: https://www.econbiz.de/10011313373