Quality of working environment and corporate financial distress

This study examines the impacts of quality of working environment and its components on corporate financial distress. Employing a unique dataset of firm-level data from 63 countries over the period of 2012-2018, we find that a better working environment is related to a higher level of financial soundness. Particularly, firms which have better training and career development policies are less likely to take excessive risks. Further examination suggests that the quality of working environment tends to affect corporate financial risk by influencing firms' cash-holding policies.