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journal article May 08, 2014

Labor Mobility: Implications for Asset Pricing

ANDRÉS DONANGELO
The Journal of Finance Vol. 69 No. 3 pp. 1321-1346 · Wiley
View at Publisher Save 10.1111/jofi.12141
Abstract
ABSTRACTLabor mobility is the flexibility of workers to walk away from an industry in response to better opportunities. I develop a model in which labor flows make bad times worse for shareholders who are left with capital that is less productive. The model shows that firms face greater operating leverage by providing flexibility to mobile workers. I construct an empirical measure of labor mobility consistent with the model and document an economically significant cross‐sectional relation between mobility, operating leverage, and stock returns. I find that firms in mobile industries earn returns over 5% higher than those in less mobile industries.
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Cited By
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Metrics
264
Citations
37
References
Details
Published
May 08, 2014
Vol/Issue
69(3)
Pages
1321-1346
License
View
Authors
A
ANDRÉS DONANGELO
Funding
NASDAQ OMX Educational
Cite This Article
ANDRÉS DONANGELO (2014). Labor Mobility: Implications for Asset Pricing. The Journal of Finance, 69(3), 1321-1346. https://doi.org/10.1111/jofi.12141
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