Organization Capital, Labor Market Flexibility and Stock Returns Around the World

Abstract

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.

Measuring systematic risk from managerial organization capital

“…Moreover, Leung et al. (2018) find that OC impacts stock returns in 20 Journal of Financial and Quantitative Analysis (OECD countries. OC includes the firm's intellectual capital embodied in research and development, growth opportunities and corporate culture with respect to innovations.…”

Does Knowledge Protection Benefit Shareholders? Evidence from Stock Market Reaction and Firm Investment in Knowledge Assets

“…2 There is a growing literature linking intellectual property law and firms' financing choices. For example, Klasa, Ortiz-Molina, Serfling, and Srinivasan (2014) find that intellectual property protection affects firms' capital structure decision, and Leung, Mazouz, and Chen (2015) find that intellectual property protection benefits small firms by improving the liquidity of equity financing and reducing their costs of capital. Finally, Flammer, and Kacperczyk (2016) show that intellectual property protection affects firms' engagement in corporate social responsibility.…”

Índice Multidimensional de Proteção Trabalhista (IMPT): uma proposição metodológica

“…Os retornos dos investimentos, a produtividade do trabalho e a eficiência do mercado são também tema de diversos estudos empíricos sobre flexibilidade e proteção, assim como a existência de relação positiva entre flexibilização e retorno das ações e mercado de trabalho (LEUNG et al, 2018). De acordo com os autores, tais resultados são consistente com uma maior mobilidade laboral e concorrência em mercados de trabalho flexíveis, tornando o investimento de capital organizacional mais arriscado do ponto de vista dos acionistas.…”