000			01337nam a22001817a 4500
008			190311b xxu||||| |||| 00| 0 eng d
022			_a0304-405X
245			_aEmployee representation and financial leverage / by Chen Lin, Thomas Schmid, Yuhai Xuan _cChen Lin, Thomas Schmid, Yuhai Xuan
260			_aAmsterdam _bElsevier _cFebruary 2018
300			_aPages 303-324
440			_aJournal of Financial Economics _v127 (1) _x0304-405X
500			_aAbstract We analyze how direct employee voice affects financial leverage. German law mandates that firms’ supervisory boards consist of an equal number of employees’ and owners’ representatives. This requirement, however, applies only to firms with more than two thousand domestic employees. We exploit this discontinuity and the law’s introduction in 1976 for identification and find that direct employee power increases financial leverage. This is explained by a supply side effect: as banks’ interests are similar to those of employees, higher employee power reduces agency conflicts with debt providers, leading to better financing conditions. These findings reveal a novel mechanism of direct employee influence.
690			_aCapital structure
690			_aFinancial leverage
690			_aEmployee representation
690			_aLabor rights
942			_2lcc _cSE
999			_c361336 _d361336