Abstract

Firms and other organisations develop their organisational practice in order to realise returns from given and marketable resources like real capital or labour. Organisational practices resulting in lasting above average returns must be long-term and hard to imitate. Their implementation requires substantial up-front investments.

The main goal of this project is to provide an approximation of the economic relevance of establishment specific organisational capital. We apply a two step procedure to the IAB-establishment panel. In the first step an establishment specific performance differential is extracted from a within panel estimator. In the second step, this differential is explained by organisational and control variables. The estimation results allow us to predict the contribution of organisational practices to the performance differential and we coin this part of the firm specific performance differential organisational capital .