Institutional Investment Horizons and Labor Investment Efficiency

Conditional conservatism and labor investment efficiency

“…More recently, Ghaly, Dang, and Stathopoulos (2015) investigate how the investment horizon of a firm's institutional shareholders affects the efficiency of its labor investments and find that long-term investors have greater incentives to engage in effective monitoring, which reduces agency conflicts in labor investment choices. Besides, Ben-Nasr and Alshwer (2016) find that labor investment efficiency is positively related to stock price informativeness.…”

Trust and the cost of debt financing

“…Both classical economics and the finance literature stress the importance of tangible assets and human capital. There is a large strand of studies that has looked at the process and efficiency of physical asset investment as well as the influence of human capital on productivity (Biddle et al, 2009;Ghaly et al, 2015;García Lara et al, 2016). A recent literature has also emerged that studies a firm's intellectual capitaltheir investment in research and development (R&D).…”

Board gender diversity and corporate labor investment efficiency

“…To empirically test the impact of corporate board gender diversity on labor investment efficiency, we regress the 1-year ahead abnormal net hiring, |Ab_Net_Hire i,t+1 |, on board gender diversity in current year while controlling for other potential determinants of labor investment efficiency (Ghaly et al, 2015;Jung et al, 2014). Specifically, our baseline model is as follows:…”

“…Ben‐Nasr and Alshwer (2016) also document that high stock price informativeness improves information environment and leads to better monitoring, both of which affect labor investment in a positive way. In Ghaly et al (2015), the authors argue that better governance imposed by long‐horizon institutional investors leads to more efficient labor investment. Our study is the first that examines the impact of corporate board gender diversity on labor investment decisions.…”

“…Second, we add to the emerging literature on corporate finance and labor investment. Previous studies have identified the quality of reporting (Jung et al., 2014), institutional monitoring (Ghaly, Dang, & Stathopoulos, 2015), the informativeness of stock prices (Ben‐Nasr & Alshwer, 2016), and CEO social network (Khedmati, Sualihu, & Yawson, 2019) as significant determinants in labor investment efficiency. We extend this strand of literature by examining the association between board gender diversity and firm efficiency in labor investment.…”