Abstract
Using a newly assembled 56 country, 23,000 firm database, we document that firms affiliated with business groups display less pronounced fluctuations in employment than unaffiliated firms during business cycle changes, especially during economic downturns. The mitigated response of group affiliated firms to economic shocks is specific to countries with less stringent employment protection laws, possibly reflecting the greater flexibility business groups have to relocate employees across firms in those countries. Consistent with efficient labor dynamics within business groups, employment declines in poorly performing firms and increases in better performing firms. The results are robust to a battery of endogeneity tests.
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
