Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/20201
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dc.contributor.authorMerz, Monikaen_US
dc.contributor.authorYashiv, Eranen_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 aproduction-based asset pricing model with frictions in the adjustment of both capital andlabor. 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 investmentdecisions and the consequences for firms? value. We then decompose this value, therebyquantifying the link between firms? market value and gross hiring flows, employment, grossinvestment and physical capital. We find that a conventional specification – quadraticadjustment costs for capital and no hiring costs – performs poorly. Rather hiring andinvestment flows, unlike employment and capital stocks, are volatile and both are essential toaccount for market volatility. A key result is that firms? value embodies the value of hiring andinvestment over and above the capital stock.en_US
dc.language.isoengen_US
dc.publisher|aInstitute for the Study of Labor (IZA) |cBonnen_US
dc.relation.ispartofseries|aIZA Discussion paper series |x965en_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-

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