The interactive mechanism of human capital and innovative strategy on corporate performance & Its empirical analysis

Abstract

A successful innovative strategy can keep the predominance of company in the market of fierce competition, and high-level human capital can realize the enhancement of corporate performance, thus the clarifying of the interactive mechanism of innovation strategy and human capital on firm performance becomes particularly important. Data for this study were collected from 197 listed companies out of 11 industries in the People's Republic of China, and were used in hierarchical modeling to test the interrelations among innovative strategy, top management human capital, employee human capital, and corporate performance. The results reveal that top management human capital and employee human capital exhibit direct positive effects on corporate performance respectively, and human capital is the source of a firm's value enhancement The findings also show that. employee human capital mediates the relationship between top management human capital and corporate performance, thus top management human capital that enhances corporate performance needs to fit with employee human capital, and top management should inspire employees to behave their human capital to create value for the firm. Furthermore, the findings indicate that there is an interfering interactive effect between innovative strategy and top management human capital on corporate performance. Therefore, the level of top management human capital and its development should maintain fairly good coordination with the determination and implementation of firm innovative strategy so as to achieve high performance and obtain competitive advantage.