Employee Relations and the Likelihood of Occurrence of Corporate Financial Distress

24 Pages Posted: 22 Jun 2005

See all articles by Gregory D. Kane

Gregory D. Kane

University of Delaware - Accounting & MIS

Uma Velury

University of Delaware - Accounting & MIS

Bernadette Ruf

Delaware State University - Accounting and Finance Department

Abstract

In this paper, we investigate the association of employee relations with the occurrence of onset of financial distress. We argue that if adverse economic conditions arise, firms that have maintained good employee relations will be more effective in obtaining temporary labor concessions. As a result, firms with good employee relations, to the extent they are dependent on labor in the conduct of business operations, should be more likely to avoid the onset of future financial distress. The empirical findings we document support this prior.

Suggested Citation

Kane, Gregory D. and Velury, Uma and Ruf, Bernadette, Employee Relations and the Likelihood of Occurrence of Corporate Financial Distress. Journal of Business Finance & Accounting, Vol. 32, No. 5-6, pp. 1083-1105, June 2005, Available at SSRN: https://ssrn.com/abstract=736416

Gregory D. Kane

University of Delaware - Accounting & MIS ( email )

Alfred Lerner College of Business and Economics
Newark, DE 19716
United States
302-998-0221 (Phone)
302-831-6750 (Fax)

Uma Velury (Contact Author)

University of Delaware - Accounting & MIS ( email )

Alfred Lerner College of Business and Economics
Newark, DE 19716
United States

Bernadette Ruf

Delaware State University - Accounting and Finance Department ( email )

Dover, DE 19901
United States

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