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Personnel Investments and Abnormal Return: Knowledge‐based Firms and Human Resource Accounting

BO HANSSON (STOCKHOLM UNIVERSITY)

Journal of Human Resource Costing & Accounting

ISSN: 1401-338X

Article publication date: 1 February 1997

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Abstract

This study examines the pricing of knowledge‐based firms compared with firms that are less dependent on human resources. The results show that an increasing dependence on human resources is followed by a rise in abnormal return. The results indicate that investors are not able to distinguish personnel investments from expenses, leading to an underestimation of earnings and return. The findings suggest that investors may need accounting information on human resources to help improve investment decisions. There is no evidence in the present material to suggest that investors perceive knowledge‐based firms as more risky compared with firms with more accountable (tangible) assets.

Citation

HANSSON, B. (1997), "Personnel Investments and Abnormal Return: Knowledge‐based Firms and Human Resource Accounting", Journal of Human Resource Costing & Accounting, Vol. 2 No. 2, pp. 9-29. https://doi.org/10.1108/eb029037

Publisher

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MCB UP Ltd

Copyright © 1997, MCB UP Limited