Does it pay to treat employees well?: The case of informal finance

We examine the role of employee treatment in firms’ access to informal finance form trade credit. find that better improves amount a firm can obtain. This effect is stronger environments with (1) more intensive product market competition, (2) highly customized inputs, (3) lower social capital and (4) high demand for skilled labor. Furthermore, varies according firm's financial health liquidity. Employee becomes less important firms having low level liquidity but pronounced experiencing distress.