Corporate Financial Leverage in Canadian Manufacturing: Consequences for Employment and Inventories
Bibliographic record
Abstract
Abstract This paper investigates the link between financial structure and employment growth and the link between financial structure and inventory growth, among incorporated Canadian manufacturers over the period 1988 to 1997. It finds that financially vulnerable firms—smaller firms and those with higher leverage—tend to shed more labour than healthier firms for an equal sized drop in product demand. When a demand shock occurs, a firm with high leverage sheds nearly 10% more employment for than a firm with average leverage. The influence was larger during the recession of 1990–1992 and more significant in sectors that were hit hardest by the recession. This is as one would expect given that credit constraints become more binding during recessions. The influence was also larger in sectors that experienced larger cyclical fluctuations. On average, firms with high leverage also tend to cut inventories more (+5%) when a shock in demand occurs. Résumé Cette étude porte sur le lien entre la structure financière et la croissance de l'emploi et des inventaires des fabricants canadiens constitués en société au cours de la période allant de 1988 à 1997. On observe que pour une certaine baisse dans la demande de produits, les entreprises financièrement vulnérables—c'est‐à‐dire celles qui sont de petite taille ou qui ont un ratio de levier financier élevé—ont tendance à réduire davantage leurs effectifs que les entreprises en meilleure santé financière. Lorsqu'un choc à la baisse survient dans la demande de produits, les coupures d'emploi sont près de 10 % plus élevées dans les entreprises avec un ratio de levier financier élevé, en comparaison avec les entreprises dont le ratio se situe dans la moyenne. Cette influence était plus marquée durant la récession de 1990 à 1992, et était plus significative dans les industries qui ont été plus durement touchées par la récession. Ce résultat n'est pas surprenant dans la mesure où les conditions de crédit sont plus contraignantes en période de récession. Enfin, les entreprises avec un ratio de levier financier élevé tendent à réduire davantage leurs inventaires (dans une proportion de 5 %) lorsque survient un choc de la demande.
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How this classification was reachedexpand
Full frame distilled prediction
Teacher imitationNot calibrated prevalence, not ground truth. Human validation pending. Learned from the 10,348 direct Codex labels and 10,348 direct Gemma labels. Candidate is the union of thresholded teacher heads; consensus is their intersection. These outputs are machine_predicted_unvalidated and are not human labels or direct frontier model labels.
Codex and Gemma teacher scores by category
| Category | Codex | Gemma |
|---|---|---|
| Metaresearch | 0.003 | 0.001 |
| Meta-epidemiology (narrow) | 0.000 | 0.000 |
| Meta-epidemiology (broad) | 0.000 | 0.000 |
| Bibliometrics | 0.001 | 0.001 |
| Science and technology studies | 0.001 | 0.003 |
| Scholarly communication | 0.000 | 0.001 |
| Open science | 0.000 | 0.000 |
| Research integrity | 0.000 | 0.000 |
| Insufficient payload (model declined to judge) | 0.000 | 0.000 |
Machine scores (provisional)
The two teacher heads of the student model, read on this work. A score orders the frame for review; it never asserts a category, and the validation status ships verbatim with every row.
Baseline scores from an immature model (maturity gate not passed, 7 training rounds). Scores rank; they never assert a category.
score_only:v0-immature-baseline · verbatim from the scoring run: score_only means the number may rank works, and no category label ships from itClassification
machine, unvalidatedMachine predicted; a candidate call from one teacher head, not a consensus.
How this classification was reached, model by model and score by score, is at the end of the page under "How this classification was reached".