The DOI matches its Crossref record; 84 of the 84 references it cites were found in a registry or an index.
Human Capital, Bankruptcy, and Capital Structure
Abstract
We derive the optimal labor contract for a levered firm in an economy with perfectly competitive capital and labor markets. Employees become entrenched under this contract and so face large human costs of bankruptcy. The firm's optimal capital structure therefore depends on the trade‐off between these human costs and the tax benefits of debt. Optimal debt levels consistent with those observed in practice emerge without relying on frictions such as moral hazard or asymmetric information. Consistent with empirical evidence, persistent idiosyncratic differences in leverage across firms also result. In addition, wages should have explanatory power for firm leverage.
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Cites
Theory of the firm: Managerial behavior, agency costs and ownership structure
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The Cost of Capital, Corporation Finance and the Theory of Investment
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The cost of capital, corporation finance and the theory of investment
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What Do We Know about Capital Structure? Some Evidence from International Data
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The Determinants of Capital Structure Choice
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The theory and practice of corporate finance: evidence from the field
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Managing with Style: The Effect of Managers on Firm Policies
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Cited by
Does the stock market fully value intangibles? Employee satisfaction and equity prices
Edmans, A. (2011) · Journal of Financial Economics · doi:10.1016/j.jfineco.2011.03.021 · Cited by 2,511
A Review of Empirical Capital Structure Research and Directions for the Future
Graham, J. R., & Leary, M. T. (2011) · Annual Review of Financial Economics · doi:10.1146/annurev-financial-102710-144821 · Cited by 547
The common factor in idiosyncratic volatility: Quantitative asset pricing implications
Herskovic, B., Kelly, B., Lustig, H., & Van Nieuwerburgh, S. (2016) · Journal of Financial Economics · doi:10.1016/j.jfineco.2015.09.010 · Cited by 398
Simintzi, E., Vig, V., & Volpin, P. (2015) · Review of Financial Studies · doi:10.1093/rfs/hhu053 · Cited by 389
Van BINSBERGEN, J. H., GRAHAM, J. R., & YANG, J. (2010) · The Journal of Finance · doi:10.1111/j.1540-6261.2010.01611.x · Cited by 313
Metadata
- Authors
- BERK, J. B., STANTON, R., & ZECHNER, J.
- Venue
- The Journal of Finance
- Publisher
- Wiley
- Published
- 2010-05-07
- Volume
- 65
- Issue
- 3
- Pages
- 891-926
- ISSN
- 0022-1082 (ISSN-L)
- 1540-6261
- OpenAlex
- W2132211785
- Cited by
- 599
- References
- 84
- FWCI
- 104.67
- Type
- journal article
- Language
- en
- Open access
- closed
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Contains information from the Semantic Scholar Academic Graph Datasets, made available under the ODC Attribution License (ODC-BY 1.0).
Semantic Scholar’s data is described in: Kinney, R., et al. (2023). The Semantic Scholar Open Data Platform. arXiv:2301.10140.
