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Employee satisfaction and long-run shareholder returns

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  • Chun-Hung (Hugo) Tang
  • Ji-Eun Lee

Abstract

This study empirically tests whether there are differences in the employee satisfaction premium among people- and possession-processing service firms, information-processing service firms, and goods-producing firms. The employee satisfaction premium is measured using the long-run abnormal returns of firms with high employee satisfaction ratings, adjusted for industry and size effects. Results show that the employee satisfaction premium is higher for information-processing services than for people- and possession-processing services. There is no significant difference between people- and possession-processing service firms and goods-producing firms. This finding suggests that employee satisfaction may create higher value for shareholders when it is realised through information-processing services rather than people- and possession-processing services.

Suggested Citation

  • Chun-Hung (Hugo) Tang & Ji-Eun Lee, 2014. "Employee satisfaction and long-run shareholder returns," The Service Industries Journal, Taylor & Francis Journals, vol. 34(14), pages 1167-1183, October.
    • Handle: RePEc:taf:servic:v:34:y:2014:i:14:p:1167-1183
    DOI: 10.1080/02642069.2014.939639
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    References listed on IDEAS

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