Wards Finance Seminar Series. Firm-Level Labor-Shortage Exposure
Published: 5 February 2024
13 March. Professor Jarrad Harford, University of Washington
Professor Jarrad Harford, University of Washington
"Firm-Level Labor-Shortage Exposure"
Wednesday, 13 March. 15:00
Room 282 (Hot House) ASBS PGT Building
Abstract
We use FinBERT to extract information from earnings calls to develop a novel and reliable measure of labor shortage exposure. We demonstrate the validity of our measure by showing that states with higher levels of labor-shortage exposure experience lower future unemployment rates but higher wage growth, while firms with higher labor-shortage exposure have greater future staff expenses, lower earnings call CARs, future stock returns and operating performance. Firms respond by substituting labor with capital and R&D investments, and by producing more production process patents, mitigating the negative effects on future performance. The evidence provides insight into factors affecting labor-capital substitution.
Bio
Jarrad Harford is the Paul Pigott - PACCAR Professor of Finance and Chair of the Finance and Business Economics Department at the University of Washington’s Foster School of Business. He earned his PhD in Finance with a minor in Organizations and Markets at the University of Rochester. His teaching focuses on core finance and acquisition analysis.
Professor Harford currently serves as a Managing Editor of the Journal of Financial and Quantitative Analysis and recently completed a 20-year term as an Associate Editor for the Journal of Financial Economics. In the past, he has served as an Associate Editor for the Review of Financial Studies and the Journal of Corporate Finance. His primary research areas are mergers and acquisitions, corporate governance and payout policy, and he has published more than 35 papers on these topics in top finance journals. In 2023, Pearson-Prentice Hall published the sixth edition of a Fundamentals of Corporate Finance, co-authored by Prof. Harford.
For further information, please contact business-school-research@glasgow.ac.uk
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First published: 5 February 2024