Business Strategy and Firms’ Labor Investment Efficiency
One of the most important issues in the company's value creation process is investment. In this regard, investing in labor force is one of the most important types of investments. As one of the main factors of production, labor is an important tool for economic growth. Labor costs cover almost...
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| Format: | Article |
| Language: | fas |
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University of Sistan and Baluchestan
2023-05-01
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| Series: | اقتصاد باثبات |
| Subjects: | |
| Online Access: | https://sedj.usb.ac.ir/article_7671_8049e4fb466b7a501450e09b83b963cc.pdf |
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| author | Gholamreza Rezaei Ramin Zeraatgari Navid Reza Namazi Amir Sarvestani |
| author_facet | Gholamreza Rezaei Ramin Zeraatgari Navid Reza Namazi Amir Sarvestani |
| author_sort | Gholamreza Rezaei |
| collection | DOAJ |
| description | One of the most important issues in the company's value creation process is investment. In this regard, investing in labor force is one of the most important types of investments. As one of the main factors of production, labor is an important tool for economic growth. Labor costs cover almost two-thirds of the added value of the entire economy. In addition to the cost of direct labor, companies also incur significant costs to ensure the health and safety of the workforce at work. Considering the significant direct and indirect costs related to the labor force, effective investment in the labor force is extremely important for companies to remain competitive and gain profitability. This paper examines the relation between firm level business strategy and their labor investment efficiency for the companies listed on Tehran Stock Exchange. The research methodology is a quantitative and ex-post. Labor investment efficiency was measured using the Pinnuck and Lillis model. 124 companies were selected as the research sample and the data of these companies were used to analysis in the period of 2010-2020. The results of the research regression analysis showed that there is positive and significant relationship between business strategy and labor investment inefficiency; That is, companies with prospector type business strategy exhibit less efficiency in labor investment than companies with defender type. Also, regression results indicated that there is positive and significant relationship between business strategy and overinvestment (underinvestment) in labor; That is, companies with prospector (defender) type business strategy are more involved in overinvestment (underinvestment) in labor. This study suggest that firm level business strategy is one of the factors affecting the labor investment efficiency and decision makers (including investors to buy or sell stocks and legislators in the field of employment) should pay special attention to firm level business strategy. |
| first_indexed | 2024-03-09T02:56:25Z |
| format | Article |
| id | doaj.art-bdd65cbf044942e5a3dbb86715757c4a |
| institution | Directory Open Access Journal |
| issn | 2821-1049 |
| language | fas |
| last_indexed | 2024-03-09T02:56:25Z |
| publishDate | 2023-05-01 |
| publisher | University of Sistan and Baluchestan |
| record_format | Article |
| series | اقتصاد باثبات |
| spelling | doaj.art-bdd65cbf044942e5a3dbb86715757c4a2023-12-05T04:50:06ZfasUniversity of Sistan and Baluchestanاقتصاد باثبات2821-10492023-05-0141486810.22111/sedj.2023.44925.13147671Business Strategy and Firms’ Labor Investment EfficiencyGholamreza Rezaei0Ramin Zeraatgari1Navid Reza Namazi2Amir Sarvestani3Associate Professor, Department of Accounting, Faculty of Management and Economics, University of Sistan and Baluchestan, Zahedan, Iran.Associate Professor, Department of Accounting, Faculty of Management and Economics, University of Sistan and Baluchestan, Zahedan, Iran.Assistant Professor, Department of Accounting, Faculty of Economics, Management and Social Sciences, Shiraz University, Shiraz, Iran.Assistant Professor, Department of Accounting, Technical and Vocational University, Tehran, Iran.One of the most important issues in the company's value creation process is investment. In this regard, investing in labor force is one of the most important types of investments. As one of the main factors of production, labor is an important tool for economic growth. Labor costs cover almost two-thirds of the added value of the entire economy. In addition to the cost of direct labor, companies also incur significant costs to ensure the health and safety of the workforce at work. Considering the significant direct and indirect costs related to the labor force, effective investment in the labor force is extremely important for companies to remain competitive and gain profitability. This paper examines the relation between firm level business strategy and their labor investment efficiency for the companies listed on Tehran Stock Exchange. The research methodology is a quantitative and ex-post. Labor investment efficiency was measured using the Pinnuck and Lillis model. 124 companies were selected as the research sample and the data of these companies were used to analysis in the period of 2010-2020. The results of the research regression analysis showed that there is positive and significant relationship between business strategy and labor investment inefficiency; That is, companies with prospector type business strategy exhibit less efficiency in labor investment than companies with defender type. Also, regression results indicated that there is positive and significant relationship between business strategy and overinvestment (underinvestment) in labor; That is, companies with prospector (defender) type business strategy are more involved in overinvestment (underinvestment) in labor. This study suggest that firm level business strategy is one of the factors affecting the labor investment efficiency and decision makers (including investors to buy or sell stocks and legislators in the field of employment) should pay special attention to firm level business strategy.https://sedj.usb.ac.ir/article_7671_8049e4fb466b7a501450e09b83b963cc.pdfemploymentoverinvestment in laborbusiness strategyunderinvestment in labor |
| spellingShingle | Gholamreza Rezaei Ramin Zeraatgari Navid Reza Namazi Amir Sarvestani Business Strategy and Firms’ Labor Investment Efficiency اقتصاد باثبات employment overinvestment in labor business strategy underinvestment in labor |
| title | Business Strategy and Firms’ Labor Investment Efficiency |
| title_full | Business Strategy and Firms’ Labor Investment Efficiency |
| title_fullStr | Business Strategy and Firms’ Labor Investment Efficiency |
| title_full_unstemmed | Business Strategy and Firms’ Labor Investment Efficiency |
| title_short | Business Strategy and Firms’ Labor Investment Efficiency |
| title_sort | business strategy and firms labor investment efficiency |
| topic | employment overinvestment in labor business strategy underinvestment in labor |
| url | https://sedj.usb.ac.ir/article_7671_8049e4fb466b7a501450e09b83b963cc.pdf |
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