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Reprint of: The hidden cost of organisation capital: Evidence from trade credit

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  • Khoo, Joye
  • Cheung, Adrian (Wai Kong)

Abstract

Organisation capital is an important firm-specific resource that is linked to value created by key talents, and the risk arising from the unexpected departure of key talents is detrimental to the firm. We find that trade credit decreases with organisation capital, particularly when labour mobility is greater or employees have more outside opportunities. This supports the agency view of organisation capital. However, when the threat of losing key talents is low, such as during the global financial crisis, the efficiency view of organisation capital prevails, making firms with high organisation capital more attractive customers for suppliers. The evidence is robust to endogeneity tests.

Suggested Citation

  • Khoo, Joye & Cheung, Adrian (Wai Kong), 2025. "Reprint of: The hidden cost of organisation capital: Evidence from trade credit," The British Accounting Review, Elsevier, vol. 57(1).
    • Handle: RePEc:eee:bracre:v:57:y:2025:i:1:s0890838925000022
    DOI: 10.1016/j.bar.2025.101552
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    Keywords

    Organisation capital; Trade credit;

    JEL classification:

    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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