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Organization Capital and Expected Returns in Service and Non‐Service Firms: Evidence from Thailand
Author(s) -
Amatachaya Srisuda,
Saengchote Kanis
Publication year - 2020
Publication title -
international review of finance
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.489
H-Index - 18
eISSN - 1468-2443
pISSN - 1369-412X
DOI - 10.1111/irfi.12209
Subject(s) - business , capital asset pricing model , service (business) , risk premium , capital (architecture) , cost of capital , finance , stock exchange , physical capital , capital structure , financial economics , economics , human capital , microeconomics , marketing , profit (economics) , debt , history , economic growth , archaeology
Organization capital provides firms with competitive advantage, but because of its intangible and movable nature, investors view firms with high organization capital as risker and demand additional risk premia. Similar to Eisfeldt and Papanikolaou (2013), we find that firms in the Stock Exchange of Thailand with highest organization capital earn abnormal returns of 0.75% per month relative to the four‐factor asset pricing model. In addition, we also document that the organization capital risk premium is more relevant for service firms than non‐service ones.