Employee Satisfaction, Labor Market Flexibility, and Stock Returns Around the World

• 成果类型: Article
• 署名作者: Edmans, Alex; Pu, Darcy; Zhang, Chendi; Li, Lucius
• 署名单位: University of London; London Business School; Centre for Economic Policy Research - UK; European Corporate Governance Institute; University of Exeter
• 刊物名称: MANAGEMENT SCIENCE
• ISSN/ISSBN: 0025-1909
• DOI: 10.1287/mnsc.2023.4889
• 发表日期: 2024
• 页码: 4357-4380
• 关键词: employee satisfaction; labor market flexibility; Socially responsible investing; Corporate social responsibility; ESG investing

摘要

Studying 30 countries, we find that the link between employee satisfaction and stock returns is significantly increasing in a country's labor market flexibility. This result is consistent with employee satisfaction having greater recruitment, retention, and motivation benefits where firms face fewer hiring and firing constraints and employees have greater ability to respond to satisfaction. Labor market flexibility also increases the link between employee satisfaction and current valuation ratios, future profitability, and future earnings surprises, inconsistent with omitted risk factors and identifying channels through which employee satisfaction may affect stock returns. The findings have implications for the differential profitability of socially responsible investing strategies around the world-in particular, the importance of considering institutional factors when forming such strategies.