with frictions in the adjustment of both capital and labor. We posit that hiring of labor is akin to investment in capital ….S. corporate sector data to estimate firms? optimal hiring and investment decisions and the consequences for firms? value. We then … investment and physical capital. We find that a conventional specification – quadratic adjustment costs for capital and no hiring …

The decisions of firms on investment and hiring play a crucial role in business cycle fluctuations. This paper explores … investment costs. It is significant and negatively signed, implying complementarity between investment and hiring. There is a … investment part of the model is poor if hiring is left out completely or is introduced without the interaction between the two …