Cross-Validation of Customer and Employee Signals and Firm Valuation

  title={Cross-Validation of Customer and Employee Signals and Firm Valuation},
  author={Christopher Groening and Vikas Mittal and Yan Zhang},
AbstractPrevious studies have shown that a firm needs to rely on its customers and employees to achieve superior performance. In this study, the authors draw on signaling theory to develop and empirically test a cross-validation argument. They argue that how a firm treats one stakeholder group will be interpreted by investors in conjunction with how the firm treats another stakeholder group. Investors use consistency in stakeholder group treatment as a signal of complementarity in a firm’s… CONTINUE READING