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A Study of Human Resource Investment, Human Capital, and Firm Performance

Abstract
This research attempted to explain the relationship among HR investment, organizational human capital and firm performance. A positive link between a firm¡¦s HR investment and its performance through the mediating effect of overall human capital was proposed. Alternative hypotheses were presented to test the effect of different HR investment portfolios on various human capital dimensions, as well as the link between these human capital dimensions and firm performance outcomes. A review on the concept of human capital revealed several problems in the research of human capital at organizational level. Four new latent constructs (quantity of human capital, human capital-organization fit, complementarity of human capital, and specificity of human capital) were extracted from the literature to form a new paradigm in the measurement of organizational level human capital. This new paradigm represented a resource-based perspective.
Data were collected from top executives of 105 companies located in the US and in Taiwan in the knowledge-intensive industry segments such as professional service, financial service, R&D, and hi-tech manufacturing, etc. Survey questionnaires were used as data collection instrument. Confirmatory factor analysis using LISREL was performed to test validity and reliability of new measurement scales. Hierarchical regression statistics were used to test the hypotheses.
The results showed that HR investment had significant positive impact on firm performance and was significantly related to higher level of human capital in a firm as measured by the quantity of human capital, human capital-organization fit, complementarity of human capital, and specificity of human capital. Further, the mediating effect of firm-level human capital between HR investment and firm performance was substantiated. This study also tested a more complex model linking two HR investment portfolios to four dimensions of human capital and firm performance outcomes. The findings showed that higher level of acquisition investment was linked to higher level of human capital-organization fit, complementarity of human capital, and specificity of human capital. More significantly, a higher level of development investment was linked to higher levels of all four dimensions of human capital. In addition, each individual dimension of human capital, except the quantity of it, was found to positively predict firm performance outcomes.

Identiferoai:union.ndltd.org:NSYSU/oai:NSYSU:etd-0724106-152445
Date24 July 2006
CreatorsYeh, Chu-chen
ContributorsJin-Feng Uen, C. C. Lin, Y. C. Tung, Shyh-Jer Chen, L. C. Huang
PublisherNSYSU
Source SetsNSYSU Electronic Thesis and Dissertation Archive
LanguageEnglish
Detected LanguageEnglish
Typetext
Formatapplication/pdf
Sourcehttp://etd.lib.nsysu.edu.tw/ETD-db/ETD-search/view_etd?URN=etd-0724106-152445
Rightsunrestricted, Copyright information available at source archive

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