Measuring Organizational Capital

Schmalenbach Business Review, Vol. 61, pp. 393-412, October 2009

20 Pages Posted: 22 Feb 2010

See all articles by Oliver Ludewig

Oliver Ludewig

Government of the Federal Republic of Germany - Institute for Employment Research (IAB)

Dieter Sadowski

affiliation not provided to SSRN

Date Written: October 1, 2009

Abstract

Firms develop their organizational practices to realize returns from given and marketable resources. Implementing effective practices requires substantial up-front investment. We approximate the economic relevance of establishment-specific organizational capital by using a two-step procedure. First, we extract an establishment-specific performance differential from a within-panel estimator. Second, we explain the variation in this differential by using organizational and control variables. Our results make it possible for us to predict the contribution of organizational practices to the performance differential. We label this part of the firm-specific performance differential "organizational capital." Our results indicate that organizational capital has a substantial impact on performance.

Keywords: Managerial Economics, Organizational Capital, Organizational Design, Production Function

JEL Classification: D24, L23, M29

Suggested Citation

Ludewig, Oliver and Sadowski, Dieter, Measuring Organizational Capital (October 1, 2009). Schmalenbach Business Review, Vol. 61, pp. 393-412, October 2009, Available at SSRN: https://ssrn.com/abstract=1556746

Oliver Ludewig (Contact Author)

Government of the Federal Republic of Germany - Institute for Employment Research (IAB) ( email )

Regensburger Str. 104
Nuremberg, 90478
Germany

Dieter Sadowski

affiliation not provided to SSRN ( email )

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