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Measuring Organizational Capital


  • Oliver Ludewig
  • Dieter Sadowski


Firms develop their organizational practices to realize returns from given and marketable resources. Implementing effective practices requires substantial up-front investment. We approximate the economic relevance of establishment-specific organizational capital by using a two-step procedure. First, we extract an establishment-specific performance differential from a within-panel estimator. Second, we explain the variation in this differential by using organizational and control variables. Our results make it possible for us to predict the contribution of organizational practices to the performance differential. We label this part of the firm-specific performance differential “organizational capital”. Our results indicate that organizational capital has a substantial impact on performance.

Suggested Citation

  • Oliver Ludewig & Dieter Sadowski, 2009. "Measuring Organizational Capital," Schmalenbach Business Review (sbr), LMU Munich School of Management, vol. 61(4), pages 393-412, October.
  • Handle: RePEc:sbr:abstra:v:61:y:2009:i:4:p:393-412

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    Cited by:

    1. Beckmann, Michael & Kuhn, Dieter, 2010. "Complementarities between workplace organisation and human resource management : evidence from Swiss firm-level panel data," Working papers 2010/03, Faculty of Business and Economics - University of Basel.
    2. Marie Le Mouel & Mariagrazia Squicciarini, 2015. "Cross-Country Estimates of Employment and Investment in Organisational Capital: A Task-Based Methodology Using Piaac Data," OECD Science, Technology and Industry Working Papers 2015/8, OECD Publishing.

    More about this item


    Managerial Economics; Organizational Capital; Organizational Design; Production Function;

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • L23 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Organization of Production
    • M29 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - Other


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