@article{57362d201874467f998ab5b6ffb54d26,
title = "The Impact of Corporate Label Change on Long-term Labor Productivity",
abstract = "Corporate label change (CLC) is a common way to establish a firm's new corporate identity to drive revenue nowadays, but its merits are controversial. We investigate the impacts of CLC, being a signal of corporate identity change, on firm's long-term labor productivity. We find that CLC negatively affects long-term labor productivity. We also find that reputable and labor-intensive firms suffer more from CLC. In the post-hoc analysis, we find that these firms may increase their research & development and capital intensity in their operations prior to pursuing CLC to mitigate CLC's negative impacts. An important managerial implication of this study is that senior management should not ignore employees as a major stakeholder in making CLC decision. Our findings also offer lessons to business executives on how to manage CLC to reduce its potential negative impacts.",
keywords = "Corporate label change, Event study, Firm performance, Institutional theory",
author = "Di Fan and Lo, {Chris K.Y.} and Yeung, {Andy C. L.} and Cheng, {T. C.E.}",
note = "Funding Information: We thank the editors and anonymous referees for their many helpful comments on earlier versions of our paper. Andy Yeung was supported in part by The Hong Kong Polytechnic University under grant numbers G-YBEL and 1-99QP . T.C.E. Cheng was supported by The Hong Kong Polytechnic University under the Fung Yiu King – Wing Hang Bank Endowed Professorship in Business Administration. Table A Long-term impact of corporate label change – labor productivity. Table A Sign test Paired t -test N % Positive Sign- Z Mean Abnormal productivity Year −1 to year 0 125 40.80% −1.968 ⁎⁎ 1.698 Year 0 to year 1 112 46.43% −0.661 −15.541 ⁎⁎ Year 1 to year 2 104 52.88% 0.49 4.328 Year −1 to year 1 112 43.75% −1.228 −12.712 ⁎⁎ Year −1 to year 2 104 38.46% −2.255 ⁎⁎ −7.464 Abnormal sales growth Year −1 to year 0 125 52.81% 0.675 0.023 Year 0 to year 1 112 50.56% 0.075 −0.002 Year 1 to year 2 104 45.51% −0.537 −0.042 Year −1 to year 1 112 51.69% 0.375 0.021 Year −1 to year 2 104 46.07% −0.974 −0.021 Abnormal SOA Year −1 to year 0 125 44.38% −1.424 −0.003 Year 0 to year 1 112 55.63% 1.302 0.015 Year 1 to year 2 104 55.74% 1.177 0.027 Year −1 to year 1 112 50.99% 0.163 0.023 Year −1 to year 2 104 54.10% 0.815 0.053 Abnormal forfeited options Year −1 to year 0 125 46.43% −0.546 −0.010 Year 0 to year 1 112 60.00% 1.677 ⁎ 0.014 Year 1 to year 2 104 51.32% 0.115 0.034 Year −1 to year 1 112 55.70% 0.900 0.006 Year −1 to year 2 104 56.00% 0.924 0.029 ⁎⁎ , ⁎ indicate statistically significant at the 0.05 and 0.1 levels (two-tailed), respectively. Table B Median changes in labor productivities of sample and control firms. Table B Change of sample firms' productivity Change of control firms' productivity Median WSR-Z Median WSR-Z Year −1 to year 0 −0.013 −0.901 0.330 0.647 Year 0 to year 1 0.890 0.914 1.378 2.285 ⁎⁎ Year 1 to year 2 1.091 0.976 0.177 0.178 Year −1 to year 1 −0.215 −0.369 1.772 1.765 ⁎ Year −1 to year 2 −1.841 −0.460 5.511 2.280 ⁎⁎ WSR tests were conducted to compared each median with zero. ⁎⁎ , ⁎ indicate statistically significant at the 0.05 and 0.1 levels (two-tailed), respectively. Table C Abnormal labor performance without samples with CEO turnovers and M&A activities. Table C Abnormal productivity N Median WSR- Z Year −1 to year 0 100 −1.567 −1.496 Year 0 to year 1 93 −2.698 −2.482 ⁎⁎ Year 1 to year 2 86 0.785 0.058 Year −1 to year 1 93 −5.677 −2.466 ⁎⁎ Year −1 to year 2 86 −5.529 −2.243 ⁎⁎ ⁎⁎⁎ , ⁎⁎ , ⁎ indicate statistically significant at the 0.01, 0.05, and 0.1 levels (two-tailed), respectively. Table D Abnormal labor performance from Barber and Lyon (1996) matching. Table D Abnormal productivity N Median WSR- Z Year −1 to year 0 125 −0.650 −1.157 Year 0 to year 1 112 −2.310 −2.261 ⁎⁎ Year 1 to year 2 104 −2.350 −1.667 ⁎ Year −1 to year 1 112 −2.710 −2.167 ⁎⁎ Year −1 to year 2 104 −5.840 −3.295 ⁎⁎⁎ ⁎⁎⁎ , ⁎⁎ , ⁎ indicate statistically significant at the 0.01, 0.05, and 0.1 levels (two-tailed), respectively. Dr . Fan is an assistant professor at School of Business, Macau University of Science and Technology. His research interests are organization identity and corporate social responsibility. His papers in this area are published in Journal of Operations Management and Manufacturing and Service Operations Management . Dr . Lo is an associate professor at Institute of Textiles and Clothing, The Hong Kong Polytechnic University. His research interests are Quality Management, Supply Chain Management, Green Production and Institutional Theory. His papers in this area are published in Journal of Operations Management , Manufacturing and Service Operations Management and Organization Science . Prof . Cheng is the Fung Yiu King – Wing Hang Bank Professor in Business Administration of Faculty of Business, The Hong Kong Polytechnic University. Professor Cheng has co-authored 14 books and published over 650 research papers in journals including the California Management Review , Journal of Management Information Systems , Journal of Operations Management , Management Science , MIS Quarterly , Operations Research , Production and Operations Management , and Organization Science . Prof . Yeung is the Chair Professor of Operations Management at Faculty of Business, The Hong Kong Polytechnic University. His research interests are Quality Management, Process Certifications and Operations and Supply Chain Management in general. Professor Yeung conducted research on the benefits and drawbacks of business certifications. His papers in this area are published in Journal of Operations Management , Production and Operations Management , Manufacturing and Service Operations Management and Organization Science . Publisher Copyright: {\textcopyright} 2018",
year = "2018",
month = may,
doi = "10.1016/j.jbusres.2018.01.048",
language = "English",
volume = "86",
pages = "96--108",
journal = "Journal of Business Research",
issn = "0148-2963",
publisher = "Elsevier Inc.",
}