We use the staggered adoption of Wrongful Discharge Laws (WDLs) by U.S. state courts as a quasi-natural experiment to examine the causal impact of firing costs and employment protection on corporate payouts. We find that the greater employment protection imposed by WDLs leads to higher share repurchases, and that this finding is more pronounced among firms with greater financial resources and better governance. Our results support the argument that as higher firing costs enhance employee entrenchment and encourage rent extraction behavior, firms have an incentive to increase share buybacks to mitigate a wealth transfer from shareholders to employees.

中文翻译：

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就业保护和股票回购：来自不当解雇法的证据

我们将美国各州法院交错采用的不当解雇法 (WDL) 作为准自然实验来检验解雇成本和就业保护对公司支出的因果影响。我们发现 WDL 施加的更大的就业保护导致更高的股票回购，并且这一发现在拥有更多财务资源和更好治理的公司中更为明显。我们的结果支持这样的论点，即随着更高的解雇成本增强员工的巩固并鼓励租金提取行为，公司有动机增加股票回购以减轻从股东到员工的财富转移。