Enterprise Labor Employment,Labor Adjustment Cost And Capital Structure

The influencing factors of corporate capital structure have always been the focus of academic and practical circles.This paper will study the relationship between employment and capital structure from the perspective of labor adjustment cost.Based on the panel data of listed companies in China from 2006 to 2018,this paper conducts an empirical analysis using the bidirectional fixed effect model to investigate the impact of labor employment on capital structure.Firstly,this paper establishes a mediating effect model to test the transmission mechanism of the influence of labor and employment on capital structure.After that,the heterogeneity of labor Contract Law before and after its promulgation,by scale,by property rights,by industry and by region was analyzed.The following conclusions can be drawn from the empirical study :(1)the increase of the company's employment level will reduce the company's debt financing;(2)The increase in the number of employees will increase the labor adjustment cost of the company,thus reducing the leverage level of the company;(3)Heterogeneity analysis shows that the Labor Contract Law stipulates that employers pay multiple expenses for employees,which increases the labor adjustment cost of enterprises.Therefore,after the enactment of the law,the impact of labor employment on capital structure is more significant.The employment-capital structure relationship is more significant in small and medium-sized enterprises,state-owned enterprises,technology-intensive industries,and enterprises in high-marketization areas.Based on the above conclusions,this paper argues that,the company can according to the labor employment mechanism to suit the remedy to the case the influence of capital structure,reduce the marginal increase labor adjustment costs,to reduce the cost of labor employment,training,at the same time the government can also provide policy and financial support,in the above link to reduce labor hiring inhibitory effect on capital structure,make capital structure to remain in a reasonable level to promote the development of the company.