Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/264430 
Year of Publication: 
2022
Citation: 
[Journal:] The Journal of Entrepreneurial Finance (JEF) [ISSN:] 1551-9570 [Volume:] 24 [Issue:] 2 [Article No.:] 7 [Publisher:] The Academy of Entrepreneurial Finance (AEF) [Place:] Los Angeles, CA [Year:] 2022 [Pages:] 1-42
Publisher: 
The Academy of Entrepreneurial Finance (AEF), Los Angeles, CA
Abstract: 
We examine the inter-relationships among employee-friendly policies (EFP), innovation through R&D investment, and firm value. We hypothesize that firms with higher levels of innovation and entrepreneurial spirit are more likely to utilize EFP. Furthermore, we speculate that the value-EFP association is more pronounced in firms with high R&D intensity. Consistent with these assertions, we find that EFP is significantly and positively related to R&D investment and the number of patents. EFP is also associated with increased firm value at high levels of R&D investment and high numbers of patents. Furthermore, we find that firms investing more in R&D are more likely to treat their workers favorably and that markets react positively when such firms are recognized for their favorable treatment of employees. Our analysis, based on a large sample of U.S.-based firms and two different measures of employee-friendly policies, supports the assertion that EFP based on sustainable innovation and entrepreneurial mindsets contributes to value creation
Subjects: 
Employee-friendly practices
Human capital
R&D investment
Sustainable innovation
Entrepreneurial spirit
Value creation theory
JEL: 
G30
G39
O32
Creative Commons License: 
cc-by-nc Logo
Document Type: 
Article

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