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Financial Implications of the Decision to Increase Reliance on Contingent Labor *
Author(s) -
Nayar Nandkumar Nandu,
Willinger G.
Publication year - 2001
Publication title -
decision sciences
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.238
H-Index - 108
eISSN - 1540-5915
pISSN - 0011-7315
DOI - 10.1111/j.1540-5915.2001.tb00976.x
Subject(s) - economics , popularity , standard deviation , balance sheet , stock (firearms) , systematic risk , econometrics , finance , statistics , mechanical engineering , psychology , social psychology , mathematics , engineering
This paper provides the first systematic examination of the financial implications associated with increased reliance on contingent (i.e., temporary/part‐time) labor. Using measures of performance from income statement and balance sheet data, and stock returns, we find that the adoption of this labor practice is associated with superior subsequent performance. Concurrently, no increase in systematic risk and standard deviation of stock returns is observed. The increase in performance with no concurrent increase in systematic risk and standard deviation of returns perhaps explains the increasing popularity of this labor practice.