Organization Capital

Baruch Lev, Suresh Radhakrishnan and Weining Zhang

Abacus, 2009, vol. 45, issue 3, 275-298

Abstract: We develop a firm‐specific measure of the most important intangible asset—organization capital—and document that organization capital is associated with five years of future operating and stock return performance, after controlling for other factors. Thus, our organization capital measure captures firms' fundamental ability to generate abnormal performance. We also find that executive compensation is positively associated with our measure of organization capital, showing that the measure indeed reflects managerial ability.

Date: 2009
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https://doi.org/10.1111/j.1467-6281.2009.00289.x

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Persistent link: https://EconPapers.repec.org/RePEc:bla:abacus:v:45:y:2009:i:3:p:275-298

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