Skilled Labor Hiring Constraints and Debt Maturity Structure

Abstract

Exploiting a large drop in the legislative cap for the H-1B visa program announced in 2003 as an adverse shock to the skilled labor supply of innovation (Kerr and Lincoln (2010)) and a difference-in-differences framework, I document that innovative firms experience a significant increase in their fraction of shorter maturity debt after the shock. Further, I show that such increase is consistent with the fact that innovative firms face important labor adjustment costs and refinancing constraints after the cap drop. Overall, my paper highlights that skilled labor hiring constraints affect debt maturity structure.