Journal of Corporate Finance Vol. 84 2024
Labor-saving innovations and capital structure
Abstract
This paper presents evidence that labor-saving technologies positively impact a firm's financial leverage. The results are robust with two different measures of labor-saving innovations: automation and process innovations. The effects are more pronounced in firms facing greater labor input rigidity, such as firms with higher labor intensity, share of minimum wage workers, and union coverage. Our analysis suggests that labor-saving innovations reduce wage rigidity, allowing firms to increase financial leverage.
- DOI
- 10.1016/j.jcorpfin.2023.102510
- Volume
- 84
- Pages
- 102510
- Language
- en
- Sources
- bibtex:phds-export.bib openalex crossref