Islamic Human Capital and Firm Performance: An Evidence of Small and Medium Enterprises in Bahrain

Abstract

This paper discusses on the human capital concept in Islamic perspectives and its relationship with business firmperformance. There are emphases of Islamic principles on every well-known variables of human capital inconventional views. Muslims owner-managers seem to overlook and forget the importance and valuableelements of Islamic human capital which they rarely adopt in their business operations. Four variables ofexperience, motivation, business training and education are tested using the multiple regression analysis inrelation with firm performance. The study approach is evidence-based positivism and employs quantitativedeductive hypotheses testing methods. The sample size (N) is 140 Muslims’owner-managers of small andmedium enterprises randomly picked from Bahrain. It is found that the three variables of experience, motivationand training are have significant relationship with firms’ growth, while another variable (education) hasinsignificant relationship. This findings may add knowledge to the small and medium firm performanceliterature especially in Islamic views, help policy makers in their decision making and assist theowner-managers to improve their performance.