• DOI:10.1111/jofi.12254
Corpus ID: 14403917

Capital and Labor Reallocation within Firms

@article{Giroud2014CapitalAL,
  title={Capital and Labor Reallocation within Firms},
  author={Xavier Giroud and H. Mueller},
  journal={Corporate Governance & Finance eJournal},
  year={2014}
}

Xavier Giroud, H. Mueller

Published 2014

Economics, Business

Corporate Governance & Finance eJournal

We document how a shock to investment opportunities at one plant (“treated plant”) spills over to other plants within the same firm, but only if the firm is financially constrained. To provide the treated plant with resources, headquarters withdraws capital and labor from other plants, especially from plants that are relatively less productive, not part of the firm’s core industries, and located far away from headquarters. As a result of the resource reallocation, aggregate firm-wide… CONTINUE READING

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