Does the Stock Market Fully Value Intangibles? Employee Satisfaction and Equity Prices
This paper analyzes the relationship between employee satisfaction and long-run stock performance. An annually rebalanced portfolio of Fortune magazines Best Companies to Work For in America earned 14％ per year from 1998-2005, over double the market return. The portfolio also outperformed industry- and characteristics-matched benchmarks; controlling for risk, it yielded a four-factor alpha of 0.64％. These findings have three main implications. First, employee satisfaction may improve corporate performance rather than representing ineffi ciently excessive non-pecuniary compensation. Second, the stock market does not fully value intangibles, even when independently verified by a publicly available survey. This suggests that intangible investment generally may not be incorporated into short-term prices, providing support for managerial myopia theories. Third, socially responsible investing (SRI) screens need not reduce investment returns.
Employee satisfaction market efficiency short-termism managerial myopia human capital socially responsible investing
Alex Edmans
Wharton School,University of Pennsylvania
国际会议
大连
英文
1-32
2008-07-02（万方平台首次上网日期，不代表论文的发表时间）