Stock Performance and the Firm’s Training Program

This paper examines if a portfolio of firms with the best training program consistently outperforms the market. This study constructs an equally-weighted portfolio of top 10 companies ranked in the Training Top 125 each year from 2001 to 2010. In particular, this study compares the performance of each equally-weighted portfolio to the performance the S&P 500 index and value-weighted CRSP index using monthly CRSP return data. The results show that 9 out of the 10 portfolios outgain the value-weighted CRSP index by as high as 100 basis points and as low as 11 basis points, and 7 out of the 10 portfolios outperform the S&P 500 index by as low as 7 basis points and as high as 80 basis points