Financial constraints and firm employment: Evidence from Turkey
We examine the effect of financial constraints on firms' employment growth. We use the maturing debt approach which uses the fact that the amount of long term credit maturing in a particular year can be considered as an exogenous financial constraint on firms’ employment decision in that year....
| Main Authors: | , |
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| Format: | Article |
| Language: | English |
| Published: |
Elsevier
2021-03-01
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| Series: | Borsa Istanbul Review |
| Subjects: | |
| Online Access: | http://www.sciencedirect.com/science/article/pii/S2214845020300399 |
| _version_ | 1818025050022871040 |
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| author | Aslıhan Atabek Demirhan Altan Aldan |
| author_facet | Aslıhan Atabek Demirhan Altan Aldan |
| author_sort | Aslıhan Atabek Demirhan |
| collection | DOAJ |
| description | We examine the effect of financial constraints on firms' employment growth. We use the maturing debt approach which uses the fact that the amount of long term credit maturing in a particular year can be considered as an exogenous financial constraint on firms’ employment decision in that year. Our findings reveal that financing constraints have an adverse impact on employment creation in Turkey. Moreover, we show that there is a strong heterogeneity with respect to size for the finance-employment relation. Maturing long-term debt existence reduces employment growth in small firms while there is no significant impact on large firms. Our results also imply that the phase of business cycle matters on the finance-employment relation; credit constraints bind employment growth only in the period of financial turmoil. |
| first_indexed | 2024-12-10T04:09:56Z |
| format | Article |
| id | doaj.art-f544a1caa66c46bba451f06a2536eef9 |
| institution | Directory Open Access Journal |
| issn | 2214-8450 |
| language | English |
| last_indexed | 2024-12-10T04:09:56Z |
| publishDate | 2021-03-01 |
| publisher | Elsevier |
| record_format | Article |
| series | Borsa Istanbul Review |
| spelling | doaj.art-f544a1caa66c46bba451f06a2536eef92022-12-22T02:02:45ZengElsevierBorsa Istanbul Review2214-84502021-03-012116979Financial constraints and firm employment: Evidence from TurkeyAslıhan Atabek Demirhan0Altan Aldan1Central Bank of the Republic of Turkey, Structural Economic Research Department, Hacı Bayram Mah. İstiklal Cad. No:10 06050 Ulus, Altındağ, Ankara, TurkeyCorresponding author.; Central Bank of the Republic of Turkey, Structural Economic Research Department, Hacı Bayram Mah. İstiklal Cad. No:10 06050 Ulus, Altındağ, Ankara, TurkeyWe examine the effect of financial constraints on firms' employment growth. We use the maturing debt approach which uses the fact that the amount of long term credit maturing in a particular year can be considered as an exogenous financial constraint on firms’ employment decision in that year. Our findings reveal that financing constraints have an adverse impact on employment creation in Turkey. Moreover, we show that there is a strong heterogeneity with respect to size for the finance-employment relation. Maturing long-term debt existence reduces employment growth in small firms while there is no significant impact on large firms. Our results also imply that the phase of business cycle matters on the finance-employment relation; credit constraints bind employment growth only in the period of financial turmoil.http://www.sciencedirect.com/science/article/pii/S2214845020300399J23D21C23C55 |
| spellingShingle | Aslıhan Atabek Demirhan Altan Aldan Financial constraints and firm employment: Evidence from Turkey Borsa Istanbul Review J23 D21 C23 C55 |
| title | Financial constraints and firm employment: Evidence from Turkey |
| title_full | Financial constraints and firm employment: Evidence from Turkey |
| title_fullStr | Financial constraints and firm employment: Evidence from Turkey |
| title_full_unstemmed | Financial constraints and firm employment: Evidence from Turkey |
| title_short | Financial constraints and firm employment: Evidence from Turkey |
| title_sort | financial constraints and firm employment evidence from turkey |
| topic | J23 D21 C23 C55 |
| url | http://www.sciencedirect.com/science/article/pii/S2214845020300399 |
| work_keys_str_mv | AT aslıhanatabekdemirhan financialconstraintsandfirmemploymentevidencefromturkey AT altanaldan financialconstraintsandfirmemploymentevidencefromturkey |