This study provides empirical evidence for the economic rationality of wage rigidities. Theoretically wage rigidities can result from contracts, implicit contracts, from efficiency wages and from insider-outsider behaviour. Based on a survey of 801 firms strong support has been found for...

This paper incorporates the cost of adjustment between observed and optimal leverage in explaining the variation in firm's equity or bank-debt financing investments. Using a dynamic adjustment approach identifies the determinants to capital structure between different financial systems. In...