The Influence Of Dismissal Cost On The Capital Structure Of Enterprises

The increase in labor protection has increased the cost of dismissal,which will further affect the operation of the company.From the research of the "Labor Contract Law" by domestic scholars,it mainly discusses the situation that the strengthening of labor protection has brought about the transformation and upgrading of enterprises,improved business flexibility,and investment efficiency.However,the research on the capital structure of enterprises and the speed of capital structure adjustment is still insufficient.Therefore,the impact of the Labor Contract Law on the capital structure of enterprises and the speed of capital structure adjustment is an urgent matter to be studied.When analyzing the "labor contract law" brought about the increase in the cost of dismissal,and further impact on the capital structure of enterprises and the speed of capital structure adjustment,this article mainly based on the domestic economic market and related domestic references.Therefore,this article believes that the increase in termination costs makes it difficult for companies to fire employees.Regardless of the business situation,companies must pay employees 'wages and fixed fees such as five insurance and one gold,and employee expenses become part of the financial leverage of an enterprise.In turn,the financial leverage of companies has increased and the financial ratio has increased.The management of these highly indebted companies will further increase the corporate debt ratio in order to maintain higher competition,eliminate other market entrants and achieve strategic goals,and the speed of corporate capital restructuring will also decline.Taking the data of Listed Companies in 2004-2011 years as samples,this paper constructs a double difference model based on the principle of enterprise stratification in the labor contract law on the basis of natural events and labor intensity.The regression results show that the increase of the cost of dismissal will increase the debt ratio of enterprises and decrease the speed of capital structure adjustment,and this effect is more significant for enterprises with high labor intensity.At the same time,this paper uses parallel trend hypothesis test,propensity score matching method to deal with missing variables,other indicators of labor intensity change and capital structure adjustment speed,etc.Therefore,from the perspective of capital structure,this article provides a reference factor for the government to formulate labor protection laws and adjust the capital structure of enterprises.At the same time,it also enriches the influence of the Labor Contract Law on the operation of enterprises.