How much do firms need to satisfy employees? - Evidence from credit spreads and online employee reviews

Koji Takahashi and Sumiko Takaoka

No 1111, BIS Working Papers from Bank for International Settlements

Abstract: Using employee reviews accumulated in online platform service and ESG scores, this paper studies the relationship between firms' workforce benefits and their credit risk. We provide evidence that the sign of the effect of employee treatment on credit spreads depends on the sectoral intensity of human capital. In a sector with high intensity of human capital, especially in the manufacturing sector, more generous benefits for workers lead to lower credit spreads. In contrast, in a sector with low intensity, they are associated with larger credit spreads. We also find evidence that the lowering effect on credit spreads in sectors with high human capital intensity is mainly due to increased labor productivity.

Keywords: employee satisfaction; online employee review; credit risk; labor risk (search for similar items in EconPapers)
JEL-codes: G12 J28 J32 (search for similar items in EconPapers)
Date: 2023-07
New Economics Papers: this item is included in nep-hrm, nep-lma and nep-sbm
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Persistent link: https://EconPapers.repec.org/RePEc:bis:biswps:1111

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