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SUMMARY:Decomposing Firm Value
DTSTART:20180518T103000
DTEND:20180518T120000
DTSTAMP:20260407T061507Z
UID:1f3ffd6e7d4a1e633bd3e71a9448730f8c1ae8490ec412f033bf8e18
CATEGORIES:Conferences - Seminars
DESCRIPTION:Frederico BELO (University of Minnesota\, Carlson School of Ma
 nagement)\nWhat are the economic determinants of firms' market values? We 
 answer this question through the lens of a generalized neoclassical model 
 of investment with physical capital\, quasi-fixed labor\, and two types of
  intangible capital\, knowledge capital and brand capital. We estimate the
  structural model using  firm-level data on U.S. publicly traded firms an
 d use the parameter values to infer the contribution of each input for exp
 laining firms' market value in the last four decades. The model performs w
 ell in explaining both cross-sectional and time-series variation of firms'
  market values\, with a time series R2 of 71% and a cross sectional R2 of 
 94%. We find that\, on average\, physical capital accounts for 29.6% of fi
 rms' market value\, installed labor force accounts for 27.2%\, knowledge c
 apital accounts for 6.1%\, and brand capital for 37.1%. These values vary 
 substantially across industries and over time. We document that the import
 ance of physical capital for firm value has decreased over time\, while th
 e importance of labor and brandcapital has increased\, especially in indus
 tries that rely relatively more on high skill workers than on low skill wo
 rkers. Overall\, our value decomposition provides direct empirical evidenc
 e supporting models with multiple capital inputs as main sources of firm v
 alue.
LOCATION:UNIL\, Extranef\, room 126 https://planete.unil.ch/plan/?local=EX
 T-126
STATUS:CONFIRMED
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