Investment in organization capital

Carlin, B I and Chowdhry, B and Garmaise, M J (2012) Investment in organization capital. Journal of Financial Intermediation, 21 (2). pp. 268-286. ISSN 1042-9573

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We study a firm’s investment in organization capital by analyzing a dynamic model of language development and intrafirm communication. We show that firms with richer internal language (i.e., more organization capital) have lower employee turnover, and higher diversity in skill and wages among incumbents who are promoted from within the firm. Our results also suggest that firms in rapidly changing industries are less likely to invest in organization capital, and are more likely to have high managerial turnover. Finally, our model shows that employment protection regulations lead to more investment in organization capital but less innovation.

Item Type: Article
Additional Information: The research article was published by the author with the affiliation of UCLA Anderson School
Subjects: Finance
Date Deposited: 03 Aug 2023 19:46
Last Modified: 03 Aug 2023 19:46

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