||This paper investigates the impact of firm’s reliance on skilled labor on credit spread and bond liquidity. The sample is adopted from American corporate bond with yearly data from 2002 to 2015. According to previous research, the firm with higher share of skilled workers would face the increase of substantial labor adjustment cost. In addition, firm with higher labor adjustment cost would decrease firm’s profit and increase the credit risk. Then, the relationship between credit risk and bond liquidity is negative. Therefore, we focus on the relationship between dependence on skilled labor, credit spread and bond liquidity. We use the OLS and 2SLS regressions. The result shows that firms with a higher share of skilled workers will increase LACs and lead to higher credit risk and less bond liquidity.|
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