On the Real Effect of Financial Pressure: Evidence from Firm‐Level Employment During the Euro‐Area Crisis

30 Pages Posted: 16 Apr 2019

See all articles by Filipa Da Silva Fernandes

Filipa Da Silva Fernandes

University of Aberdeen

Alexandros Kontonikas

Essex Business School

Serafeim Tsoukas

University of Glasgow - Adam Smith Business School

Date Written: June 2019

Abstract

Using a large panel of mainly unquoted euro‐area firms over the period 2003–2011, this paper examines the impact of financial pressure on firms’ employment. The analysis finds evidence that financial pressure negatively affects firms’ employment decisions. This effect is stronger during the euro area‐crisis (2010–2011), especially for firms in the periphery compared to their counterparts in non‐periphery European economies. When we introduce firm‐level heterogeneity, we show that financial pressure appears to be both statistically and quantitatively more important for bank‐dependent, small and privately held firms operating in periphery economies during the crisis.

Suggested Citation

Fernandes, Filipa Da Silva and Kontonikas, Alexandros and Tsoukas, Serafeim, On the Real Effect of Financial Pressure: Evidence from Firm‐Level Employment During the Euro‐Area Crisis (June 2019). Oxford Bulletin of Economics and Statistics, Vol. 81, Issue 3, pp. 617-646, 2019, Available at SSRN: https://ssrn.com/abstract=3372507 or http://dx.doi.org/10.1111/obes.12278

Filipa Da Silva Fernandes (Contact Author)

University of Aberdeen

Business School S46 Edward Wright Building Dunbar
Aberdeen, AB243QY
United Kingdom

Alexandros Kontonikas

Essex Business School ( email )

University of Essex
Wivenhoe Park
Colchester, CO4 3SQ
United Kingdom

Serafeim Tsoukas

University of Glasgow - Adam Smith Business School ( email )

Glasgow, Scotland
United Kingdom

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