IDEAS home Printed from https://ideas.repec.org/p/cpr/ceprdp/20229.html

Measuring Organizational Capital

Author

Listed:
  • Cai, Wei
  • Prat, Andrea
  • Yu, Jiehang

Abstract

Prior research has pointed to differences in organizational capital as a reason for the persistent performance discrepancies among similar firms. In this paper, we develop and validate new measures of organizational capital. Based on over a million crowd-sourced employee reviews scraped from Glassdoor, we construct the measures of organizational capital at the firm-year level using the word embedding model and ChatGPT-generated synthetic reviews. Our measures vary over time in accordance with macro trends, and differ both across and within firms, reflecting firm heterogeneity and major internal changes. We validate our measures by testing empirical predictions of the properties of organizational capital discussed in prior literature. Our findings suggest that this measure captures a slowly evolving intangible asset that is significantly associated with firm performance and top management's influence, aligning with the conceptualization of organizational capital by Dessein and Prat (2022). We further showcase applications of our measures in accounting, economics, finance, and management literature. Taken together, the paper provides implications for various stakeholders who are interested in assessing and managing firms' organizational capital.

Suggested Citation

  • Cai, Wei & Prat, Andrea & Yu, Jiehang, 2025. "Measuring Organizational Capital," CEPR Discussion Papers 20229, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:20229
    as

    Download full text from publisher

    File URL: https://cepr.org/publications/DP20229
    Download Restriction: no
    ---><---

    More about this item

    Keywords

    ;

    JEL classification:

    • M21 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - Business Economics

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cpr:ceprdp:20229. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: CEPR (email available below). General contact details of provider: https://cepr.org/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.