A copy of this work was available on the public web and has been preserved in the Wayback Machine. The capture dates from 2017; you can also visit the original URL.
The file type is
I examine how the labor market in which firms operate affects their capital structure decisions. Using the US Census Bureau data, I exploit a large plant opening as an abrupt increase in the size of a local labor market. I find that a new plant opening leads to a 2.6% to 3.9% increase in the debt-to-capital ratio of existing firms in the "winner" county relative to the "runner-up" choice. This result is consistent with larger labor markets making a job loss less costly, which in turn reducesdoi:10.2139/ssrn.2689865 fatcat:vctn7s4dsvb3bltrcu36vtlcc4