HR as cost or investment: the distinction between near- Vs. Longer-term focus of firm valuation
HR as cost or investment: the distinction between near- Vs. Longer-term focus of firm valuation
This study empirically investigates the myopic approach stock market takes towards human capital investment decisions. Focusing on human capital investment decisions' alignment with short- versus long-term financial motivations of the firm, we examine firms listed in the Financial Times Stock Exchange (FTSE) 100 over a five-year period using an established accounting- based valuation model. The results show that investors of firms that allocate a greater (smaller) portion of value added to their employees will overweight (underweight) forecasted long-term earnings and underweight (overweight) forecasted short-term earnings. The findings challenge the mainstream argument of using human resource expenditure as the primary proxy for firms' human capital investment; rather taking it as an investment that manifests itself in generating future returns.
British Academy of Management
Vithana, Krishanthi
f6916e65-2c61-43ab-8ce3-897a2f8b6591
Jayasekera, Ranadeva
341476a7-e831-4acb-97bc-df681bd4fe73
Choudhry, Taufiq
6fc3ceb8-8103-4017-b3b5-2d38efa57728
Baruch, Yehuda
25b89777-def4-4958-afdc-0ceab43efe8a
Vithana, Krishanthi
f6916e65-2c61-43ab-8ce3-897a2f8b6591
Jayasekera, Ranadeva
341476a7-e831-4acb-97bc-df681bd4fe73
Choudhry, Taufiq
6fc3ceb8-8103-4017-b3b5-2d38efa57728
Baruch, Yehuda
25b89777-def4-4958-afdc-0ceab43efe8a
Vithana, Krishanthi, Jayasekera, Ranadeva, Choudhry, Taufiq and Baruch, Yehuda
(2018)
HR as cost or investment: the distinction between near- Vs. Longer-term focus of firm valuation.
In 78th Annual Meeting of the Academy of Management, AOM 2018.
British Academy of Management..
(doi:10.5465/AMBPP.2018.9).
Record type:
Conference or Workshop Item
(Paper)
Abstract
This study empirically investigates the myopic approach stock market takes towards human capital investment decisions. Focusing on human capital investment decisions' alignment with short- versus long-term financial motivations of the firm, we examine firms listed in the Financial Times Stock Exchange (FTSE) 100 over a five-year period using an established accounting- based valuation model. The results show that investors of firms that allocate a greater (smaller) portion of value added to their employees will overweight (underweight) forecasted long-term earnings and underweight (overweight) forecasted short-term earnings. The findings challenge the mainstream argument of using human resource expenditure as the primary proxy for firms' human capital investment; rather taking it as an investment that manifests itself in generating future returns.
Full text not available from this repository.
More information
e-pub ahead of print date: 9 July 2018
Venue - Dates:
78th Annual Meeting of the Academy of Management, AOM 2018, Chicago, United States, 2018-08-10 - 2018-08-14
Identifiers
Local EPrints ID: 425523
URI: https://eprints.soton.ac.uk/id/eprint/425523
PURE UUID: f7868320-a2a3-4ff4-a6ba-526bbe7425e5
Catalogue record
Date deposited: 23 Oct 2018 16:30
Last modified: 10 Dec 2019 01:49
Export record
Altmetrics
Contributors
Author:
Ranadeva Jayasekera
University divisions
Download statistics
Downloads from ePrints over the past year. Other digital versions may also be available to download e.g. from the publisher's website.
View more statistics
