There is zero correlation between the prominence of corporations’ values (as touted online) and the firms’ performance, says a team led by Luigi Guiso of the Einaudi Institute for Economics and Finance in Italy. What matters instead is employees’ assessments of companies’ integrity. High levels of perceived integrity are associated with higher productivity and profitability; a 1-standard-deviation increase in integrity is associated with a 0.19-standard-deviation increase in a firm’s Tobin’s Q ratio.
(Source: Journal of Financial Economics)
Published in Dawn, Economic & Business July 27th, 2015
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