Organization Capital And Stock Returns

In the era of knowledge economy with economic globalization,intangible assets have become a key factor for enterprises to establish competitive advantages in long-term domestic and foreign market competition.Organization capital,as a special intangible asset,is a collection of shared knowledge,corporate culture and related regulations formed within the organization.Organization capital makes the internal information transmission of the enterprise more rapid and promotes the exchanges between various departments.It also plays a vital role in improving the firms'operating efficiency and market value.The passage starts with analyzing the risks faced by enterprises and focus on the correlation between organizational capital and stock returns.The company's investment in organization capital is mainly reflected in the incentives for key talents and the expenditure to establish a close relationship between talents and organizations.Eisfeldt&Papanikolaou?2013?^[1]believes that due to the uncertainty of technological shocks in the external market,firms need to cost more when they reward key talents.In other words,the investment of organizational capital exposes shareholders to additional risks of technological shocks,requiring higher stock returns.Considering the particularity and effectiveness of Chinese capital market,the assay shows that the impact of information asymmetry on the relationship between organization capital and stock returns cannot be ignored.This article believes that the impact of information asymmetry on organizational capital and stock returns cannot be ignored.On the one hand,it affects the liquidity of individual stocks in the market,and on the other hand,it affects the principal-agent relationship between enterprises and employees.For state-owned enterprises,the problem of asymmetric internal information is usually more serious than that of non-state-owned enterprises.Therefore,this paper introduces the illiquidity factor ILLIQ and considers the impact of information asymmetry on the relationship between organizational capital and stock returns,and attempts to explain the difference between state-owned and non-state-owned enterprises.The essay first reviews the relevant literature,then analyzes the organization capital and related theories,and use the perpetual inventory method to measure the organization capital of Chinese enterprises.Next,it proposes research hypotheses and design models for related issues and conducts empirical research based on the asset pricing model,distinguishing the nature of the company's equity and industry.Finally,the essay draws conclusions and prospect for future research.This paper mainly draws the following conclusions combined with the empirical analysis of Stata:?1?Organization capital can better reflect the economic characteristics and performance of Chinese enterprises,but when used as a pricing factor,it only has a good ability to explain the asset prices of non-state-owned enterprises;?2?The situation of information asymmetry not only brings risks to the enterprise but also increases the agency cost of the enterprise.When the explanatory variable is the stock return rate,the coefficient of the information asymmetry is significantly positive and the coefficient of the cross term is significantly negative;?3?In most KTI and LI industries,organization capital has significant positive correlation on stock returns,but for CI industries,organization capital is insufficient.