The Cross-Sectional Effect of Inflation on Corporate Investment and Employment
This paper examines the cross-sectional effect of inflation on the investment and employment decisions. The paper shows that more heavily capitalized firms tend to have a greater reduction in the capital-labor ratio during an inflationary period. The paper also shows that firms with a higher cost of debt to wage ratios and a larger amount of depreciation shelter tend to use more labor in the inflationary period. Empirical results are generally consistent with these arguments.
Review of Quantitative Finance and Accounting
WU, Chunchi and Kim, Moon.
The Cross-Sectional Effect of Inflation on Corporate Investment and Employment. (1993). Review of Quantitative Finance and Accounting. 3, (2), 203-220. Research Collection Lee Kong Chian School Of Business.
Available at: http://ink.library.smu.edu.sg/lkcsb_research/859