The Measurement of Firm-Specific Organization Capital
- Topics:
- Equity
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Overview: This article develops a firm-specific measure of organization capital and estimates it for a sample of approximately 250 companies. It tests the validity of the organization capital measure within a widely used investment valuation model and shows that the organization capital estimate contributes significantly to the explanation of market values of firms, beyond assets in place and expected abnormal earning. It then examines whether capital markets are efficient with respect to organization capital, namely whether stock prices fully reflect the value of this resource. It finds that while investors recognize the importance of organization capital, they do not fully factor its value into equity prices.
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Format: PDF | Size: 165KB | Date: Mar 2003 | Pages: 42
