How Is Organization Capital Priced in the Korean Market?
- Resource Type
- Academic Journal
- Authors
- Mei Liu; Saeyeul Park
- Source
- 기업과혁신연구. 2022-09 45(3):3-21
- Subject
- Organization Capital
Human Capital Risk
Stock Returns
Intangible Investments
- Language
- Korean
- ISSN
- 2671-6224
2671-6232
In this paper, we test whether the positive relationship between organization capital and stock return documented in the US stock market holds in the Korean stock market, and whether the difference is caused by human capital risk. The results show that organization capital does not appear to affect stock returns in Korea. Although a recursive stock proxy based on total SG&A generates a significant difference in excess return between high and low portfolios, the difference does not seem to be attributable to organization capital and human capital risk. The hypothesis that the difference may be caused by higher downside risk from sticky SG&A costs is also ruled out. The results provide evidence against a human capital risk explanation for the effect of organization capital on stock returns.