Government contracts and labor investment efficiency

IF 7.2 1区经济学 Q1 BUSINESS, FINANCE

Journal of Corporate Finance Pub Date : 2025-03-04 DOI:10.1016/j.jcorpfin.2025.102771

Pedro Monteiro , Masim Suleymanov

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Abstract

This study investigates the impact of government contracts on labor investment efficiency in U.S. public firms between 2001 and 2019. We find that firms awarded with government contracts exhibit improved labor investment efficiency, characterized by reduced abnormal labor hiring, evident in both overinvestment and underinvestment issues. Government contracts are particularly beneficial for financially constrained firms, enhancing their ability to manage labor resources effectively. Additionally, the regulatory framework associated with government contracts reduces labor overinvestment, although it may exacerbate underinvestment where labor rights are weak. The political sensitivity of contractors also improves labor investment efficiency. However, this effect diminishes with contractors' increased bargaining power. Contrary to expectations, political connections and lobbying activities do not significantly alter the impact of government contracts on labor investment efficiency. This study highlights the nuanced role of government contracts in shaping labor investment practices and unravels the underlying mechanisms driving these outcomes, thus contributing to the literature on government contracts, corporate finance, and labor rights.

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政府合同与劳动投资效率

本研究考察了2001年至2019年美国上市公司政府合同对劳动力投资效率的影响。我们发现，获得政府合同的企业表现出更高的劳动力投资效率，其特征是非正常劳动力雇佣减少，这在过度投资和投资不足问题上都很明显。政府合同对资金紧张的企业尤其有利，提高了它们有效管理劳动力资源的能力。此外，与政府合同相关的监管框架减少了劳动力过度投资，尽管它可能会加剧劳动力权利薄弱的投资不足。承包商的政治敏感性也提高了劳动力投资效率。然而，这种效应随着承包商议价能力的增强而减弱。与预期相反，政治关系和游说活动并未显著改变政府合同对劳动投资效率的影响。本研究强调了政府合同在塑造劳动力投资实践中的微妙作用，并揭示了推动这些结果的潜在机制，从而为政府合同、企业融资和劳工权利方面的文献做出了贡献。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

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来源期刊

Journal of Corporate Finance BUSINESS, FINANCE-

CiteScore

11.80

自引率

3.30%

发文量

期刊介绍： The Journal of Corporate Finance aims to publish high quality, original manuscripts that analyze issues related to corporate finance. Contributions can be of a theoretical, empirical, or clinical nature. Topical areas of interest include, but are not limited to: financial structure, payout policies, corporate restructuring, financial contracts, corporate governance arrangements, the economics of organizations, the influence of legal structures, and international financial management. Papers that apply asset pricing and microstructure analysis to corporate finance issues are also welcome.