Employee Flexibility, Exogenous Risk, and Firm Value
2019 ◽
pp. 1-32
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Keyword(s):
We hypothesize that employee flexibility enhances firm value by helping firms respond to exogenous shocks. We estimate employee-flexibility scores through textual analysis of online job reviews, and we find that a high flexibility score leads to superior stock returns for firms exposed to external risk. During 2011–2017, the value-weighted hedge portfolio formed on employee flexibility earned a 5-factor annualized alpha of 9.5% during periods of high policy uncertainty. Earnings-announcement returns also suggest that investors do not fully value workforce flexibility. These results indicate that employee flexibility is a valuable corporate intangible that helps firms to manage risk during uncertain times.
2012 ◽
Vol 47
(5)
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pp. 1059-1088
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Keyword(s):
Keyword(s):
2021 ◽
Vol 80
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pp. 590-604
Keyword(s):
Keyword(s):