Business Strategy and Labor Investment Efficiency

Document Type : Original Article

Authors
Ghola,reza rezaei
Ramin Zeraatgari
Assistant Professor of Accounting, University of Sistan and Baluchestan, Zahedan, Iran
10.30495/jik.2024.61814.3614
Abstract
This paper examines the relation between frim 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.
Keywords
employment
overinvestment in labor
business strategy
underinvestment in labor
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