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The importance of employee skills and the moderating role of unemployment rate in capital structure decisions
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Abbas Parsafar *    , Mohsen Tavakoli Shandiz , Reza Hesarzadeh |
| Faculty of Administrative and Economic Sciences, Ferdowsi University of Mashhad |
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Abstract: (11 Views) |
| Employees are the most important and valuable asset of an organization, because employees are very important as a strategy for achieving success and competitive advantage. On the other hand, deciding on the capital structure is one of the important issues for companies, because it affects the profitability of the company. Also, the unemployment rate as a macroeconomic variable can play an important role in the company's financial policies. Therefore, the main purpose of this research is to investigate the importance of employee skills and the moderating role of unemployment rate in capital structure decisions. In order to achieve the objectives of the research, the data of the companies admitted to the Tehran Stock Exchange during the years 2012 to 2020 were used. The employee skill index is composed of the three components of training, work experience and education, and the book value ratio and market financial leverage were used as indicators for capital structure decisions. The experimental results can be expressed as follows: First, the relationship between the skills of employees and the financial leverage of the companies listed in the Tehran Stock Exchange is negative and significant. Second, The relationship between employee skill and financial leverage is strengthened during periods when the unemployment rate is down. Third, the relationship between employee skill and capital structure does not change according to the indicators considered for capital structure and adds to the strength of the results. Fourth, the relationship between all components of employee skills and financial leverage is negative and significant, and the strongest relationship between the components is related to work experience. Overall, new evidence is documented to support the trade-off theory of capital structure. |
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| Keywords: Employee skill levels, Unemployment rate, Capital structure decisions, Financial leverage |
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Full-Text [PDF 766 kb]
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Type of Study: Research |
Subject:
Special
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