Citations (3)



Employee Relations and Credit Risk

Rob Bauer

Maastricht University

Jeroen Derwall

Maastricht University - European Centre for Corporate Engagement; Tilburg University - School of Economics; Maastricht University - Department of Finance

Daniel Hann

Deutsche Asset & Wealth Management; European Centre for Corporate Engagement; Maastricht University

October 3, 2009

Consistent with the theory that human capital management influences organizational performance and risk, we find that employee relations explain the cross-sectional variation in credit risk. We construct an aggregate measure for the quality of employee relations based on the firm’s engagement in employment practices and policies, and document that firms with stronger employee relations enjoy a statistically and economically lower cost of debt financing, higher credit ratings, and lower firm-specific risk. These findings are robust to the inclusion of a comprehensive set of controls and to alternative explanations.

Number of Pages in PDF File: 43

Keywords: nonfinancial stakeholders, employee relations, cost of debt, credit ratings, idiosyncratic risk

JEL Classification: M54, M12, G33, G32

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Date posted: October 7, 2009  

Suggested Citation

Bauer, Rob and Derwall, Jeroen and Hann, Daniel, Employee Relations and Credit Risk (October 3, 2009). Available at SSRN: https://ssrn.com/abstract=1483112 or http://dx.doi.org/10.2139/ssrn.1483112

Contact Information

Rob Bauer
Maastricht University ( email )
P.O. Box 616
Maastricht, 6200 MD
+31 43 3883871 (Phone)
Jeroen Derwall
Maastricht University - European Centre for Corporate Engagement ( email )
Tongersestraat 53
Maastricht, Limburg 6200MD
HOME PAGE: http://www.corporate-engagement.com/
Tilburg University - School of Economics ( email )
P.O. Box 90153
NL-5000 LE Tilburg, Brabant
HOME PAGE: http://www.tilburguniversity.nl/webwijs/show/?uid=j.m.m.derwall
Maastricht University - Department of Finance ( email )
Maastricht, 6200 MD
HOME PAGE: http://www.fdewb.unimaas.nl/finance/?page=member&id=175
Daniel Hann (Contact Author)
Deutsche Asset & Wealth Management ( email )
Mainzer Landstrasse 178-190
Frankfurt, Hesse 60327
+49-69-910-13398 (Phone)
HOME PAGE: http://https://www.deutsche-bank.de/de/content/company/Asset-and-Wealth-Management.htm
European Centre for Corporate Engagement ( email )
School of Business and Economics
Tongersestraat 53
Maastricht, Limburg 6211LM
HOME PAGE: http://www.corporate-engagement.com/
Maastricht University ( email )
Tongersestraat 53
Maastricht, 6211 LM
+31433884822 (Phone)
+31433884875 (Fax)
HOME PAGE: http://www.fdewb.unimaas.nl/finance/?page=member&id=201
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