Human Capital and SMEs Internationalization: Development and Validation of a Measurement Scale

Abstract

The purpose of this study is to develop a measurement scale for human capital in context of SMEs internationalization. Exploratory factor analysis and confirmatory factor analysis were applied on primary data collected from Indian SMEs. This developed scale was tested for reliability and validity. We found that ‘education’, ‘knowledge’, ‘experience’ and ‘skills’ are the main dimensions of human capital in SMEs, and were found reliable and valid to measure this construct. This study has combined the dimensions previously used separately in other studies. Results supported the past studies which concluded that human capital is a multidimensional construct. This study has extended multidimensionality of human capital in context of SMEs specifically in their internationalization. The study will imply to practitioners in assessment of human capital in SMEs, related to the dimensions constituting it. Objectives of policies and programmes to further enhance and develop human capital can be set accordingly. In addition, international entrepreneurship researchers can use this measurement scale to further study and investigate human capital and its components in SMEs. This study provides a ground for further adding more dimensions and variables to human capital.