This paper analyses the effects of labor intensity on a firm's operating risk and its expected stock returns. We isolate a pure labor intensity effect by using a relative measure with respect to the three-digit industry median level. We show that labor intensity is positively associated with...

We analyze the interactions between financing constraints and product market competition. Financially constrained firms face restricted access to external finance during economic downturns, precisely when their internal funds decrease. This leads to vicious circle dynamics. We argue that in...

We study the effects of product market concentration and financing constraints, separately and jointly, on the business cycle sensitivity of firms' operations. We confirm that the sensitivity is higher for firms in industries with both a low concentration and a relatively even distribution of...