Source: Dissertation Abstracts International, Volume: 79-10(E), Section: A.
Advisors: Andrea Eisfeldt Committee members: Mikhail Chernov; Francis Longstaff; Tyler Muir.
Özet:
Intangible capital embodied in the firm's key employees has become an increasingly important factor of production. Potential separation of employees upon default reduces the expected remaining value of the firm's asset. Therefore, investors should expect lower recovery rates and require higher bond spreads for labor-intensive firms. I construct a market-based proxy for firm-level recovery rates and show that recovery rate variations are an important determinant of bond spreads. Then I find firms with relatively higher labor shares have lower average recovery rates and higher spreads through quasi-experiments.