Organization Capital, Labor Market Flexibility, and Stock Returns Around the World
54 Pages Posted: 21 Apr 2015 Last revised: 6 Feb 2018
Date Written: February 5, 2018
Using data from 20 OECD countries, we find that firms with greater organization capital have significantly higher stock returns and that this represents an international phenomenon. We also find new evidence that the positive association between organization capital and stock returns increases with labor market flexibility. This finding is consistent with greater labor mobility and competition in flexible labor markets rendering organization capital investment riskier from the shareholders’ perspective.
Keywords: Organization Capital, Labor Market Flexibility, Intangibles, Stock Returns, Implied Cost of Capital
JEL Classification: G12, G15, K31, L23
Suggested Citation: Suggested Citation