TY - JOUR
T1 - Growing pains
T2 - geographic expansion and labor investment efficiency
AU - Le, Anh Tuan
AU - Huang, Henry Hongren
AU - Cheng, Tzu Chang Forrest
N1 - Publisher Copyright:
© The Author(s), under exclusive licence to Springer Science+Business Media, LLC, part of Springer Nature 2024.
PY - 2025/8
Y1 - 2025/8
N2 - This research examines the impact of geographic dispersion on firm-level labor investment efficiency. We find that geographically-dispersed firms exhibit lower labor investment efficiency, and that the negative association between geographic dispersion and labor investment efficiency takes form in both overinvestment and underinvestment. Further analyses suggest information asymmetry as the underlying mechanism for the efficiency loss. We also present that geographic dispersion leads to greater labor investment inefficiency in those firms operating in soft information environments and those employing more skilled labor. Finally, our results indicate that labor investment inefficiency accounts for the value discount of geographically-dispersed firms, highlighting the role of human capital investment in firm valuation for firms pursuing geographic diversification.
AB - This research examines the impact of geographic dispersion on firm-level labor investment efficiency. We find that geographically-dispersed firms exhibit lower labor investment efficiency, and that the negative association between geographic dispersion and labor investment efficiency takes form in both overinvestment and underinvestment. Further analyses suggest information asymmetry as the underlying mechanism for the efficiency loss. We also present that geographic dispersion leads to greater labor investment inefficiency in those firms operating in soft information environments and those employing more skilled labor. Finally, our results indicate that labor investment inefficiency accounts for the value discount of geographically-dispersed firms, highlighting the role of human capital investment in firm valuation for firms pursuing geographic diversification.
KW - Geographic dispersion
KW - Information asymmetry
KW - Labor investment efficiency
UR - https://www.scopus.com/pages/publications/85204724277
U2 - 10.1007/s11156-024-01355-4
DO - 10.1007/s11156-024-01355-4
M3 - 期刊論文
AN - SCOPUS:85204724277
SN - 0924-865X
VL - 65
SP - 619
EP - 659
JO - Review of Quantitative Finance and Accounting
JF - Review of Quantitative Finance and Accounting
IS - 2
ER -