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Communication Dans Un Congrès Année : 2012

Labor Intensity and Expected Stock Returns

Résumé

This paper analyses the effects of labor intensity on a firm's operating risk and its expected stock returns. We isolate a pure labor intensity effect by using a relative measure with respect to the three-digit industry median level. We show that labor intensity is positively associated with operating leverage, at least in the small and medium-sized firms sub sample. Stock and portfolio returns of small and, to a lesser extent, mid cap firms are positively associated with labor intensity after controlling for traditional risk factors. In particular, the labor-induced operating leverage does not seem to be explained by the book-to-market factor. The relationship between labor intensity and stock returns is stronger in low wage industries and at medium levels of financial leverage.
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hal-01634053 , version 1 (13-11-2017)

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  • HAL Id : hal-01634053 , version 1

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Gilles Chemla, Peter Pontuch. Labor Intensity and Expected Stock Returns. 2012 FMA European Conference, Jun 2012, Istanbul, Turkey. ⟨hal-01634053⟩
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