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Employment protection and corporate risk-taking

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  • Tran, Quoc Trung

Abstract

This paper examines how employment protection laws affect corporate risk-taking. Using a sample of 19,335 firms from 27 OECD countries over the period 2002–2018, we find that strong employment protection legislation reduces corporate risk-taking. Moreover, the effect of employment protection legislation on corporate risk-taking is stronger in countries of high uncertainty avoidance culture and weaker in countries of high power distance culture.

Suggested Citation

  • Tran, Quoc Trung, 2023. "Employment protection and corporate risk-taking," Finance Research Letters, Elsevier, vol. 51(C).
    • Handle: RePEc:eee:finlet:v:51:y:2023:i:c:s1544612322006511
    DOI: 10.1016/j.frl.2022.103475
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    More about this item

    Keywords

    Employment protection; Risk-taking; Corporate governance;
    All these keywords.

    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance

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