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How much do firms need to satisfy employees? - Evidence from credit spreads and online employee reviews

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  • Koji Takahashi
  • Sumiko Takaoka

Abstract

Using employee reviews accumulated in online platform service and ESG scores, this paper studies the relationship between firms' workforce benefits and their credit risk. We provide evidence that the sign of the effect of employee treatment on credit spreads depends on the sectoral intensity of human capital. In a sector with high intensity of human capital, especially in the manufacturing sector, more generous benefits for workers lead to lower credit spreads. In contrast, in a sector with low intensity, they are associated with larger credit spreads. We also find evidence that the lowering effect on credit spreads in sectors with high human capital intensity is mainly due to increased labor productivity.

Suggested Citation

  • Koji Takahashi & Sumiko Takaoka, 2023. "How much do firms need to satisfy employees? - Evidence from credit spreads and online employee reviews," BIS Working Papers 1111, Bank for International Settlements.
    • Handle: RePEc:bis:biswps:1111
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    References listed on IDEAS

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    More about this item

    Keywords

    employee satisfaction; online employee review; credit risk; labor risk;
    All these keywords.

    JEL classification:

    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
    • J28 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Safety; Job Satisfaction; Related Public Policy
    • J32 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Nonwage Labor Costs and Benefits; Retirement Plans; Private Pensions

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