Firm-level employment, labour market reforms, and bank distress
In: IWH discussion papers 2019, no. 15 (June 2019)
Abstract
We explore the interaction between labour market reforms and financial frictions. Our study combines a new cross-country reform database on labour market reforms with matched firm-bank data for nine euro area countries over the period 1999 to 2013. While we find that labour market reforms are overall effective in increasing employment, restricted access to bank credit can undo up to half of long-term employment gains at the firm-level. Entrepreneurs without sufficient access to credit cannot reap the full benefits of more flexible employment regulation.
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Sprachen
Englisch
Verlag
Halle Institute for Economic Research (IWH) - Member of the Leibniz Association
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