Using granular data on job postings and employee flows, we examine how firms adjust human capital investments during periods of uncertainty brought on by gubernatorial elections. We find
that firms reduce job postings in the six months leading up to an election, particularly for roles more costly to reverse, such as high-skilled, less flexible, and unionized positions. We also explore the sources of election uncertainty, finding stronger effects in elections where public interests focus more heavily on labor issues. Our results are consistent with the real options framework, where firms adopt a “wait and see” approach in response to uncertainty.
Citation
Nguyen, L., & Sila, V. (in press). Corporate Hiring under Uncertainty. The Review of Corporate Finance Studies,
Journal Article Type
Article
Acceptance Date
Jan 17, 2025
Deposit Date
Jan 22, 2025
Journal
The Review of Corporate Finance Studies
Print ISSN
2046-9128
Electronic ISSN
2046-9136
Publisher
Society for Financial Studies
Peer Reviewed
Peer Reviewed
Keywords
Human capital, Skilled labor, Uncertainty, Real Options
