Unemployment insurance benefits and corporate financing decisions : evidence from Europe

• Autor(a) principal: Cardoso, Patrícia Amoroso Pinto
• Data de Publicação: 2019
• Tipo de documento: Dissertação
• Idioma: eng
• Título da fonte: Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)
• Texto Completo: http://hdl.handle.net/10400.14/26882
• topic: Unemployment; Unemployment insurance benefits; Unemployment risk; Capital structure; Desemprego; Subsídio de desemprego; Risco de desemprego; Estrutura de capital; Domínio/Área Científica::Ciências Sociais::Economia e Gestão

This dissertation aims at presenting new empirical evidence regarding the relationship between unemployment risk and the corporate financing decisions of a firm. More precisely, the intent of the study is to understand how a variation in the costs of unemployment to the employees – using as a proxy the maximum unemployment insurance (UI) benefits a country provides - affects the levels of debt in a firm, as well as its operating performance. The findings indicate that there is no significant relationship between the UI benefits in one year and the changes in the capital structure of a firm the next year. Regarding the second question, empirical results suggest that there is a negative relationship between the two variables, i.e., an increase in the UI benefits will be associated with a decrease in the profitability of a firm the subsequent year.