Reprint of: The hidden cost of organisation capital: Evidence from trade credit

Joye Khoo and Cheung, Adrian (Wai Kong)

The British Accounting Review, 2025, vol. 57, issue 1

Abstract: Organisation capital is an important firm-specific resource that is linked to value created by key talents, and the risk arising from the unexpected departure of key talents is detrimental to the firm. We find that trade credit decreases with organisation capital, particularly when labour mobility is greater or employees have more outside opportunities. This supports the agency view of organisation capital. However, when the threat of losing key talents is low, such as during the global financial crisis, the efficiency view of organisation capital prevails, making firms with high organisation capital more attractive customers for suppliers. The evidence is robust to endogeneity tests.

Keywords: Organisation capital; Trade credit (search for similar items in EconPapers)
JEL-codes: G23 G32 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:bracre:v:57:y:2025:i:1:s0890838925000022

DOI: 10.1016/j.bar.2025.101552

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