Seminar (Dept. of Finance)

Theme：Growing Pains: The Effect of Labor Mobility on Corporate Investment over the Business Cycle

Speaker：John Bai, Associate Professor of Finance, D'Amore-McKim School of Business, Northeastern University

Time：2021-10-29 09:00

Address：Zoom Meeting

Language：Chinese/English

Venue：Zoom Meeting

https://zoom.us/j/83714007129?pwd=Q0dKVFJhNCtKR01pSGNhb3B4QmtCQT09 

Meeting ID：837 1400 7129

password：852464

ABSTRACT:

Procyclical investment opportunities and labor demand create time series-variation in the importance of labor mobility for corporate investment. Firms located in more mobile labor markets, captured by variation in state courts’ enforcement of covenants not to compete, increase investment rates more during economic expansions. This effect is stronger for younger firms and those with fewer employees that rely more on recruiting skilled and experienced workers to grow. This increased investment is also associated with higher sales growth rates, profits, and valuations. Overall, our results suggest that greater labor mobility reduces an important friction that constrains investment during economic expansions.

SHORT BIOGRAPHY:

John Bai is an associate professor in Finance at D’Amore-McKim School of Business at Northeastern University. John Bai’s research and teaching interests are in empirical corporate finance with a focus on labor finance and most recently using machine learning and textual analysis to study asset price movements and interactions between firms and markets. He has published in Journal of Finance, Journal of Financial Economics, Review of Financial Studies, and Harvard Business Review. He holds a Ph.D. in Financial Economics from University of Southern California.