On the Real Effect of Financial Pressure: Evidence From Firm‐Level Employment During the Euro‐Area Crisis

Filipa Da Silva Fernandes* (Corresponding Author), Alexandros Kontonikas* (Corresponding Author), Serafeim Tsoukas* (Corresponding Author)

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review


Using a large panel of mainly unquoted euro‐area firms over the period 2003–2011, this paper examines the impact of financial pressure on firms’ employment. The analysis finds evidence that financial pressure negatively affects firms’ employment decisions. This effect is stronger during the euro area‐crisis (2010–2011), especially for firms in the periphery compared to their counterparts in non‐periphery European economies. When we introduce firm‐level heterogeneity, we show that financial pressure appears to be both statistically and quantitatively more important for bank‐dependent, small and privately held firms operating in periphery economies during the crisis.
Original languageEnglish
Pages (from-to)617-646
Number of pages30
JournalOxford Bulletin of Economics and Statistics
Issue number3
Early online date23 Nov 2018
Publication statusPublished - 1 Jun 2019

Bibliographical note

We are grateful to Francesco Zanetti (Editor) and three anonymous referees for useful comments and suggestions. We also thank Nikos Giannakopoulos, Sotirios Kokas and participants at the Financial Engineering and Banking Society 2014 Conference; the UECE 2014 Conference on Economic and Financial Adjustments; the Annual 2014 Conference of Money Macro and Finance; the Financial Management Association European 2015 Conference; the Financial Management Association Annual Meeting 2015; the University of Sussex; the Vienna University of Economic and Business; and the University of Gent for comments received on an earlier draft of this paper. Any remaining errors are our own.


  • financial pressure
  • firm employment
  • Euro area
  • financial crisis


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