The Link between Job Satisfaction and Firm Value in Japan

Ben Hoffmann

Student thesis: Master thesis


This study analyses the relationship between job satisfaction and firm value in Japan during the period from 2007 to 2018. The Great Place to Work, Inc. measures job satisfaction for Japanese companies and publishes the Best Companies to Work For in Japan lists each year during the studied time period. Future stock returns and accounting measures in the form of return on assets (“ROA”) and market-to-book (“MTB”) ratios are analysed to investigate the source of outperformance of these Best Companies. A valueweighted portfolio of the lists Best Companies earned a Carhart four-factor annual alpha of 7.40% over the risk-free rate from 2007 to 2018 and an annual alpha of 6.50% over industry benchmarks. Results are robust for both equaland value weighting schemes. This dissertation suggests Best Companies perform better than industry peers and investment in job satisfaction can improve shareholder returns and are not at the expense of profits. Social responsible investing (”SRI”) screens can in fact increase investment returns and intangible assets (e.g. job satisfaction) seem to be undervalued by the market.

EducationsMSc in Advanced Economics and Finance, (Graduate Programme) Final Thesis
Publication date2019
Number of pages88
SupervisorsSteffen Andersen