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Role of human assets in measuring firm performance and its implication for firm valuation

Author

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  • Moinak Maiti

    (National Research University Higher School of Economics)

  • Darko Vuković

    (National Research University Higher School of Economics
    People’s Friendship University of Russia (RUDN University))

Abstract

The purpose of the study is to evaluate the role of human asset in firm performance and its implication for firm valuation. To do so a modified five-factor model with human asset designed for capturing the size, value, profitability and investment in average portfolio returns that performs better than both Fama–French (1993) three- and Fama–French (2015) five-factor model. Study redefines CMA factors as CvMAv that includes human assets in it. The main problem with the modified five-factor model with human asset is the microcap with conservative investment stocks whose returns behave like that low-value unprofitable firms.

Suggested Citation

  • Moinak Maiti & Darko Vuković, 2020. "Role of human assets in measuring firm performance and its implication for firm valuation," Journal of Economic Structures, Springer;Pan-Pacific Association of Input-Output Studies (PAPAIOS), vol. 9(1), pages 1-27, December.
    • Handle: RePEc:spr:jecstr:v:9:y:2020:i:1:d:10.1186_s40008-020-00223-3
    DOI: 10.1186/s40008-020-00223-3
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    References listed on IDEAS

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    Cited by:

    1. Moinak Maiti & Pravin Jadhav, 2021. "Impact of pollution level, death rate and illness on economic growth: evidence from the global economy," SN Business & Economics, Springer, vol. 1(9), pages 1-18, September.

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    More about this item

    Keywords

    Human asset; Factor models; Asset Pricing; Risk;
    All these keywords.

    JEL classification:

    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates

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