Revenue-Staff Expense Gap Widens in Public Firms, but Evidence Is Shaped by Sector and Reporting Selection
ORIGINAL / Revenue Growth and Staff Expense: A Public-Company Follow-Up to Eclipse of Rent-Sharing
Using 7,000 firm-years for 695 public companies from 2015 to 2025, the study examines whether the gap between revenue per employee and staff expense per employee has widened, and how reporting selection and sector composition affect that inference. Its contribution is showing that the gap is concentrated in financial firms and that accounting measures cannot identify real productivity or the labor-capital split.
01 ABSTRACT
The study tracks the gap between revenue per employee and staff expense per employee using public-company accounting data. In a fixed sample, nominal revenue per employee rises 83.6% while staff expense per employee rises 51.0%. The author notes the gap is concentrated in financial firms; among the other 25 reporters, staff expense per employee grows slightly faster than revenue per employee. The author stresses that these accounting measures identify neither real productivity nor the allocation of gains between labor and capital.
02 KEY FINDINGS
- In a fixed sample of 75 continuous staff-expense reporters, nominal revenue per employee rises 83.6% and staff expense per employee rises 51.0% from 2015 to 2025.
- The decline in the staff-expense-to-revenue ratio is concentrated in financial firms; among the other 25 reporters, aggregate staff expense per employee grows slightly faster than aggregate revenue per employee.
- An audit of the original paper finds some US output effects imprecisely estimated, while several Danish estimates support tighter bounds.
AI GENERATED SUMMARY / DISCOVERED BY ARXIV Q-FIN