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dc.contributor.authorMerz, Monikaen_US
dc.contributor.authorYashiv, Eranen_US
dc.coverage.temporal1976-1997en_US
dc.date.accessioned2009-01-28T16:12:22Z-
dc.date.available2009-01-28T16:12:22Z-
dc.date.issued2003en_US
dc.identifier.urihttp://hdl.handle.net/10419/20201-
dc.description.abstractWhat role does labor play in firms? market value? We explore this question using a production-based asset pricing model with frictions in the adjustment of both capital and labor. We posit that hiring of labor is akin to investment in capital and that the two interact, with the interaction being a crucial determinant of market value behavior. We use aggregate U.S. corporate sector data to estimate firms? optimal hiring and investment decisions and the consequences for firms? value. We then decompose this value, thereby quantifying the link between firms? market value and gross hiring flows, employment, gross investment and physical capital. We find that a conventional specification – quadratic adjustment costs for capital and no hiring costs – performs poorly. Rather hiring and investment flows, unlike employment and capital stocks, are volatile and both are essential to account for market volatility. A key result is that firms? value embodies the value of hiring and investment over and above the capital stock.en_US
dc.language.isoengen_US
dc.publisheren_US
dc.relation.ispartofseriesIZA Discussion paper series 965en_US
dc.subject.jelE24en_US
dc.subject.jelE23en_US
dc.subject.jelE22en_US
dc.subject.jelG12en_US
dc.subject.ddc330en_US
dc.subject.keywordproduction-based asset pricingen_US
dc.subject.keywordlabor market frictionsen_US
dc.subject.keywordgross flowsen_US
dc.subject.keywordQ-modelen_US
dc.subject.keywordGMMen_US
dc.subject.stwUnternehmenswerten_US
dc.subject.stwPersonalbeschaffungen_US
dc.subject.stwInvestitionen_US
dc.subject.stwTobin's qen_US
dc.subject.stwCapital Asset Pricing Modelen_US
dc.subject.stwMarktwerten_US
dc.subject.stwSchätzungen_US
dc.subject.stwTheorieen_US
dc.subject.stwVereinigte Staatenen_US
dc.titleLabor and the Market Value of the Firmen_US
dc.typeWorking Paperen_US
dc.identifier.ppn377465968en_US
dc.rightshttp://www.econstor.eu/dspace/Nutzungsbedingungen-
Appears in Collections:IZA Discussion Papers, Forschungsinstitut zur Zukunft der Arbeit (IZA)

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