Skip to Main content Skip to Navigation
Journal articles

Corporate Cash and Employment

Abstract : In the aftermath of the U.S. financial crisis, both a sharp drop in employment and a surge in corporate cash have been observed. In this paper, based on U.S. data, we argue that the negative relationship between the corporate cash ratio and employment is systematic, both over time and across firms. We develop a dynamic general equilibrium model where heterogenous firms need cash and external liquid funds in their production process. We analyze the dynamic impact of aggregate shocks and the cross-firm impact of idiosyncratic shocks. We show that external liquidity shocks generate a negative comovement between the cash ratio and employment, as documented in the data.
Complete list of metadata

Cited literature [54 references]  Display  Hide  Download
Contributor : Elisabeth Lhuillier Connect in order to contact the contributor
Submitted on : Wednesday, February 12, 2020 - 12:13:38 PM
Last modification on : Wednesday, November 3, 2021 - 9:43:25 AM
Long-term archiving on: : Wednesday, May 13, 2020 - 3:48:40 PM


Corporate Cash and Employment_...
Publisher files allowed on an open archive




Philippe Bacchetta, Kenza Benhima, Céline Poilly. Corporate Cash and Employment. American Economic Journal: Macroeconomics, 2019, 11 (3), pp.30-66. ⟨10.1257/mac.20150191⟩. ⟨hal-01995011⟩



Les métriques sont temporairement indisponibles