High Human Capital Research Articles

An analysis of the effect of temporary/permanent contracts on firm efficiency performance: evidence from South Korea

PurposeBecause no international accounting policy exists to mandate human capital (HC) information must be reported on financial reports, the association between workforce HC and firm performance/efficiency is not well-established. South Korea is a rare example with high HC reporting quality, as well as relatively high national productivity. On the other hand, in some developed countries (such as the UK), HC reporting quality and productivity is low. Moreover, there is an increasing propensity to offer employees non-standard contracts. Thus, because of a divergence in HC reporting quality internationally, the South Korean sample can provide valuable insights to countries with weak HC reporting quality about the association between contract quality and firm performance/efficiency.Design/methodology/approachUsing a sample of Korean listed firms (2010–2015), pooled Ordinary Least Squares (OLS) regression analysis is conducted to show whether firms that offer employees higher levels of permanent, relative to temporary contacts, demonstrate higher firm performance/efficiency.FindingsFirms that provide employees with increasing permanent (temporary) contracts experience higher (lower) performance/efficiency.Research limitations/implicationsThis research is limited due to sample selection. However, the sample represents the population of all firms that report contract type information in South Korea, a market with highly robust HC information reporting.Originality/valueBecause of data unavailability, a positive association firm-level performance/efficiency and permanent employment can only be made in a handful of countries. The study has policy implications and extends the non-financial reporting literature by addressing HC reporting limitations that exist in the mainstream accounting framework. Based on relative operational efficiency/performance, the study offers practical insights to management about the importance of staff retainment. Moreover, the authors also offer an anthropocentric perspective by inferring how low HC reporting quality can have a negative impact on society in Industry 4.0.

Road to nowhere or to somewhere? Migrant pathways in platform work in Canada

Canada boasts some of the most highly educated migrants in the world, but it is well recognised that these migrants face many labour market barriers to gainful employment despite their experience and qualification. Administrative data indicate that the proportion of gig workers is considerably higher among migrants, yet little is known about the various perceived and desired pathways of migrants who choose to pursue platform work. In this inductive, qualitative study, we interviewed 35 platform workers in Canada regarding why and how they turned to such forms of work and how it fits their overall plans for integrating into the Canadian labour market. Adopting a grounded theory approach, we found six pathways into platform work ranging from those who feel in control of the situation as a means to an end, to those who feel trapped in it, unable to find alternatives. We question how these pathways relate to macro factors (e.g. immigration status, professional status), meso factors (e.g. education and skills, networks) or micro factors (e.g. stage in life cycle, aspirations). In our analysis, we consider the critical insights offered by scholars on racial and platform capitalism in understanding the factors impacting migrants’ pathways into platform work in Canada. Our findings suggest that these structural inequalities are further perpetuated within platform work, even though in theory Canada's immigration system is merit-based with emphasis on high human capital. Migrants’ engagement in platform work is a piece of a larger puzzle of segmented labour markets.

Startup acquisitions, relocation, and employee entrepreneurship

AbstractResearch SummaryThis study examines the impact of startup acquisition on the acquired employees' propensity for entrepreneurship. As a new owner, the acquirer may not prioritize acquired employees' ideas to be commercialized internally, thereby increasing the odds that they are pursued externally. Leveraging employee‐employer matched data from U.S. Census on high‐tech startup acquisitions and their workforce in 1990–2011, I find that startup acquisitions substantially increase the rate of employee entrepreneurship both within and outside the target firm's industry. Post‐acquisition entrepreneurship is disproportionally concentrated among individuals with high human capital. Moreover, this effect is amplified when the target startup is relocated to the acquirer's location, and largely muted when left in its original location. Overall, this study highlights startup acquisitions as an important organizational precursor to employee entrepreneurship.Managerial SummaryThe past few decades have shown a significant increase in established firms acquiring startups. Although startup acquisitions can be a new source of technological innovation, talent, and market power, their long‐term outcomes likely depend on the ability to retain the acquired personnel. Using comprehensive data in the United States in 1990–2011, this study shows that startup acquisitions push many acquired employees to leave and launch their own ventures, some of which can be new competitors. This effect is disproportionately driven by the departures of founders and other top earners, who are generally the most valuable individuals to retain after the acquisition. Acquirers can mitigate these effects by allowing the acquired startup to remain in its original location rather than relocating it inside their existing establishments.

Investing in entrepreneurs: The case of franchising

Whether meant to improve public policy, private lending, or personal choices by individuals, investing in successful entrepreneurs is essential. Successful entrepreneurs typically have high human capital. Investment in entrepreneurs who have lower human capital involves more risk. Research has shown that one type of entrepreneur, franchisees, typically possess lower human capital than entrepreneurs generally. Examining a unique data set of loans by the US government to small businesses, we compare all recipients of these loans, controlling for other relevant lending, economic, and social factors. We find that franchisees have higher default rates and higher lending losses than independents.

Does the E-Commerce City Pilot Reduce Environmental Pollution? Evidence From 265 Cities in China

In order to promote the healthy and rapid development of e-commerce, China launched the construction of National E-commerce Demonstration Cities in 2009. This paper presents a feasible road to achieving sustainable development through the new urban development model. The paper employs the data of 265 cities in China from 2007 to 2016 as a research sample and uses the multiperiod difference-in-difference method to test the impact of National E-commerce Demonstration Cities pilots on urban environmental pollution. The basic result shows that urban environmental pollution is reduced by about 17.5% on average after becoming pilot cities, and the National E-commerce Demonstration Cities policy significantly reduces urban environmental pollution. We adopt a series of robustness tests, and all tests show that the basic result is still robust. Moreover, heterogeneity tests show that the pollution reduction effect of the National E-commerce Demonstration Cities policy in big cities is stronger than in small- and mid-sized cities, and there is no significant difference between the eastern cities and mid-western cities. The pollution reduction effect of the National E-commerce Demonstration Cities policy is more significant in cities with high human capital, low fiscal expenditure, and high information infrastructure. The empirical results of the spatial Dubin model show that the pilot city has no significant spatial spillover to neighboring cities. In the era of rapid development of e-commerce, this study provides a reference for developing countries to improve the urban environment and achieve sustainable development by using the new urban development model integrating e-commerce and urbanization.

Tied Migrant Labor Market Integration: Deconstructing Labor Market Subjectivities in South Africa.

The South African labor market is characterized by a high degree of inflexibility and complexity which poses significant challenges for both indigenes and migrants looking to be integrated into the labor market. These challenges are likely to be more poignant for international migrants as they face additional barriers owing to a chronically high employment rate, xenophobic sentiments, and racial exclusion. For female tied migrants, gender bias, expressed through migration policies and legislation, adds yet another layer of complexity to long-term aspirations of settling in South Africa. How well tied migrants fare in the South African labor market is an important matter for consideration. Using an intersectional approach and the theory of governmentality, this study sought to deconstruct the labor market subjectivities of tied migrants in South Africa. This paper used a qualitative approach, with a narrative and interpretivist research paradigm, on female tied migrants from Sub-Saharan Africa who either accompanied their husbands or followed them to South Africa in a process of family reunification. Although 13 interviews were carried out in total, as part of a broader study, the narratives of six participants were included in this study, to zone in on labor market experiences. The study found that despite their high human capital, tied migrants are not likely to be well integrated into the South African labor market. Their inequality in the South African labor market was attributed to their gender, ethnicity, race, migrant status and locality and various intersections thereof through which they are subjected to informality, immobility and precarity.

University Graduates and the Entrepreneurial Intention: Evidence from Indonesia

Higher education institutions are expected to cope and respond to the dynamic of society, participate in job creation and generate economic productivity. One way to make it happen is through entrepreneurship. This research aimed to propose an entrepreneurial intention model specific for higher education graduates in Indonesia. Using data from Survei Angkatan Kerja Nasional (Sakernas) 2019 and Probit analysis, this study found that there was a declining intention in graduates with higher education. So does the graduates with training certificate tend to have a lower intention. These implied that higher human capital, which is formed from education and training, tends to lead higher education graduates to non-entrepreneurship occupations. However, there is an increasing trend in entrepreneurial intention for both fresh graduates and those who have had previous jobs. Men in more mature age have higher intention into entrepreneurship, but after certain age there is an inverted U-shape relation between graduates’ age and their entrepreneurial intention.

The Second Generation Electromobility in Polish Urban Public Transport: The Factors and Mechanisms of Spatial Development

One of the key challenges on the road to sustainable mobility is the development of low/zero emission urban public transport (UPT). This is crucial in order to meet environmental requirements aiming at reducing greenhouse gas (GHG) emission. In some countries (e.g., Poland) reduction of air pollution is also an important reason behind the implementation of low/zero emission UPT. The aim of this study is to investigate the factors and mechanisms influencing the development of modern electromobility in Polish UPT. We have examined all 242 UPT systems in the country in terms of the characteristics of the relevant urban municipalities, such as size, economic prosperity, level of human and social capital, development paths of urban public transport in the long term as well as the institutional context and proximity and connections to other cities with experience in electromobility. Classification and statistical methods are used based on a variety of approaches, as assigning a score to various preliminarily identified indicators or applying correlation between quantities to verify the formulated hypotheses. Our analysis demonstrates that electromobility adoption is the result of a combination of favourable economic, urban, social and technological characteristic features of a given city. Zero or low emission buses are more common in large cities which are highly positioned in urban hierarchy, economically sound and which are characterized by a well-developed tertiary economy as well as by high human capital. An additional factor that positively influences the implementation of electromobility—in particular at the very first stage—is proximity to the location of low emission bus producers. The leadership in modern electromobility can be understood as part of a broader, proactive development policy of the cities aimed at improving the quality of life of their residents. This is especially important in medium-sized towns where utilizing electric vehicles can be an instrument to maintain or even develop their role and status. The results of the article may provide a basis for creating sustainable urban policies, especially sustainable mobility and improving environmental quality.

The influence of individual characteristics on getting involved in an entrepreneurial team: The contingent role of individualism

A traditional stereotype of the entrepreneur is that of a lone hero. However, many entrepreneurs engage in new businesses as members of entrepreneurial teams. These teams usually perform better in terms of employment generation, innovation, and profits. Thus, a relevant question is why some individuals get involved in entrepreneurship through a team rather than alone. Our explanation is focused on two variables related to the entrepreneur’s human capital: their educational level and their intrapreneurial experience. There are conflicting arguments on how these variables lead an entrepreneur to join a team, and we argue that the degree of individualism of the society helps us understand the discrepancies. We use a sample of 66,716 early-stage entrepreneurs from 66 countries surveyed by the Global Entrepreneurship Monitor between 2014 and 2017. Our results show that entrepreneurs with higher levels of education and intrapreneurial experience are more likely to be involved in the entrepreneurship process as members of teams. However, the effect of educational level is less pronounced in individualist contexts. In addition, we find that the motivation to enter entrepreneurship partially mediates these relationships, as individuals endowed with higher human capital are likely to enter entrepreneurship driven by an opportunistic motivation, which in turns makes them likely to need or join teams to reach their goals.

Employment stability and corporate cash holdings

ABSTRACT This paper investigates how a firm’s employment stability affects the level of its cash holdings. We find that firms with high employment stability (as measured by one minus a firm’s employment elasticity with respect to its sales) maintain large cash holdings. The positive effect of employment stability on cash holdings is stronger for R&D intensive firms and firms with high firm-specific human capital. These results are consistent with theories predicting that firms hold cash to signal the credibility of their employment policies regarding job security.

Does Empowering Women in Politics Boost Human Development? An Empirical Analysis, 1960–2018

ABSTRACT Does the political empowerment of women increase human development? Using equality of access to schooling and health as indicators of pro-poor development policy and objective measures of female school completion and child mortality under the age of five as measures of human capital development, pooled ordinary least square (OLS) fixed effects regressions show robustly that the political empowerment of women associates positively with higher human capital. These results are statistically significant and substantively large, and the effects of gender empowerment trump those of democracy and good governance. Since the political empowerment of women is driven by structural conditions underlying democracy and economic development, the independent effect of gender empowerment relative to effects of democracy and institutional quality suggests a powerful role for the former. Interactions between gender empowerment and factors associated with higher child mortality; namely, strict autocracy and the Middle East and North Africa region, suggest that empowerment conditions these known adverse factors in the direction of lower child mortality. For addressing endogeneity, we use 10- and 20-year lagged values of gender empowerment as instruments for current empowerment, which pass both instrument relevance and instrument exclusion criteria. Two-stage least square regressions confirm our basic results. While the causal effects of gender empowerment remain somewhat speculative, a barrage of tests on our data suggests a powerful role for gender empowerment for increasing human capital.

National Industrial Investment Fund and Corporate Innovation

As an external capital source of innovation, government subsidies are inefficient due to the lack of effective supervision. How to improve the efficiency of government innovation funds is a major issue that academia and policy-makers care about. It is not yet clear whether the National Industrial Investment Fund combines government subsidies with financial capital and conducts market-oriented operations to improve the efficiency of capital and thereby promote corporate innovation.Based on the establishment of this policy practice by the China National Integrated Circuit Industry Investment Fund in 2014, this paper uses the data of listed companies in China’s manufacturing and service industry from 2009 to 2019, and evaluates the impact of industrial funds on corporate innovation using the DID method. The research finds that the National Industrial Investment Fund has significantly increased the level of innovation input by enterprises, and also has a significant impact on innovation output. This effect is concentrated in large enterprises, capital-intensive and technology-intensive industries and cities with high human capital. The role of the National Industrial Investment Fund on corporate innovation depends on the principal-agent relationship. The National Industrial Investment Fund exerts innovative incentives on corporate agents through institutional shareholding, which not only guides the flow of funds, but also improves the efficiency of state-owned capital, thereby achieving corporate technology upgrades.The marginal contribution of this paper is as follows: （1）For the first time, this paper evaluates the effect of the National Industrial Investment Fund on corporate innovation, and provides a new policy idea to solve the inefficiency of government subsidies, that is, to achieve effective supervision and operation through state-owned capital investment in the form of industrial funds.（2）This paper provides empirical evidence for enterprises to improve their governance through institutional shareholding. Through the logical chain of external funds–institutional shareholding–corporate innovation, this paper discusses the mechanism of the role of institutional shareholding on the agency relationship of enterprises, and provides a reference for clarifying and perfecting the governance structure of listed companies in China.（3）This paper provides a strategic choice for the integrated circuit industry to break through the development dilemma. China’s integrated circuit industry is facing domestic and foreign problems, including backward technology and moral hazard, and supply chain obstruction. The state can guide the integrated circuit industry to transform from import dependence to independent innovation through the National Industrial Investment Fund.

Human Capital and Business Growth in Indonesia

This study investigates 84 companies in Bandung and Jakarta (Indonesia) related to business growth, human capital investment including education investment, health investment and work equipment using secondary data collection methods from related companies and in-depth interviews with 84 employees who are very familiar with the company's business operations then quantified using the autoregression moving average method. We found that investment in education and investment in health had a significant positive relationship with business growth. However, investment in work equipment is negatively related. This shows that the higher human capital in the company is related to the efficiency of investment in work equipment.

Classification of reproduction types of human capital in the context of state regulation

The article examines the essence of the reproduction of human capital process, reveals its main stages (phases) –formation, distribution, exchange and consumption. The specificity of each stage of reproduction of human capital is considered, which makes it possible to realize the need for purposeful investment in a person and study the problems of state regulation at each of the stages.
 The article also shows that the reproduction of human capital occurs at the individual, corporate and national levels.
 Based on the study of the literature, a classification of the types of reproduction of human capital has been developed. This allows investing in human capital in order to create high quality human capital for the country. The classification of the types of reproduction of human capital is considered according to such characteristics as: the scale of reproduction, the nature of labor resources, the direction of reproduction, the innovativeness of the reproduction process, the completeness of the reproduction process, stages (phases, stages) of the reproduction process and structural components. The expanded reproduction of human capital is disclosed in detail, on which the state regulation of the economy of the most developed countries of the world is focused. The article notes the importance of the reproduction of human capital in providing an innovative "breakthrough" in engineering, technology, organization of production and management.
 The influence of the process of reproduction of human capital on the development of the country's economy has been investigated. The necessity of enhancing the activities of the state to create conditions for the effective formation, distribution, exchange and use of human capital has been substantiated.
 The role of the state in the formation (accumulation) of human capital through public goods for a person and through the establishment of norms and rules created in society and contributing to the development of this society is presented.

Money management and entrepreneurial training in microfinance: impact on beneficiaries and institutions

This study uses a randomized control trial to evaluate the outcome of integrating money management and entrepreneurial training into a microcredit program in India. We find positive and significant effects on clients’ financial management skills and entrepreneurship abilities, particularly for clients with higher human capital, or more diligent, or having an entrepreneurial idea, and an increase in initiative and self-confidence. Effects appear stronger for clients obliged to attend the training course or more interested in attending it. By considering missed or delayed repayments reduction we assess the benefits of the training provided and of extending it for the institution.

Kaldor–Verdoorn’s law and institutions: evidence from Brazilian municipalities

Abstract Recent works on economic growth stress the importance of institutions as the main determinant of productivity growth. Yet, this literature disregards the effects of demand growth on productivity growth, as suggested by Kaldor–Verdoorn’s law. The objective of this paper was to test the direct and indirect impacts of institutions on productivity growth, controlling for human and physical capital, as well as for demand growth. Tests were performed for Brazilian municipalities and two measures of institutions were explored. Instrumental variables were used to cope with the endogeneity between economic performance and institutions. The regression results suggest that both supply-side factors and demand growth are important to explain productivity growth. Most importantly, by considering the interaction between demand growth and institutions, the results indicate that in municipalities with inclusive institutions and higher human capital, productivity growth responds more strongly to demand growth.

Air pollution and high human capital population migration: An empirical study based on 35 major cities in China

Abstract People with high human capital play an important role in promoting the technological progress and economic development of a country. The purpose of this paper is to verify whether air pollution has a certain impact on the migration of high human capital, which is rarely studied in the literature. Based on the panel data of 35 developed cities of China from 2006 to 2016, this paper uses ordinary least square (OLS) method and two-stage least squares (2SLS) method to empirically analyze the impact of air pollution on the number of international students studying in Chinese universities. The results show that cities with severe air pollution would have significantly fewer international students. Moreover, heterogeneity analysis indicates that self-financed international students are more sensitive to air pollution than public-funded students. This research indicates that air pollution governance is crucial in introducing international talents towards a higher human capital goal.

The Magnetic Value of Entrepreneurial Passion for Potential Employees

When new ventures tap into the labor market, they must battle with more established companies to recruit top human capital. We examine how an attribute known to influence new venture funders, entrepreneurial passion, also contributes to the ability of the firm to recruit employees. Through conjoint analysis of potential employee ratings of the attractiveness of working at a new venture, we demonstrate the importance of perceived passion of founders to potential employees. We show that a founder’s perceived passion for their product and for growth can enhance employer attractiveness when founders are perceived to have high human capital, but more importantly, can also compensate for founders with limited human capital. When considered together, perceived passion for product or passion for growth can compensate for low human capital of founders in attracting employees to new ventures.

Impact of industry association on the innovation of small and micro enterprises

ABSTRACT Employing OLS, GIVE and propensity score-matching (PSM) methods, this study investigates the impact of industry association on the innovation of small and micro enterprises. Using a survey of China micro and small enterprises (CMES), we find that industry association significantly and positively affects the innovative behaviour of small and micro enterprises, and political connection can enhance the innovative effect of industry association. Enterprises with specific advantages and entrepreneurs with strong innovation awareness and high human capital are likely to be an industry association member. Despite certain discriminations for micro firms, industry association welcomes innovative entrepreneurs and promotes the innovation of its members.

If You Spend It, They Will Come: Recruiting Expenses, Reputation, and Human Capital Acquisition

In this paper we examine the role that recruitment expenses, organization reputation, and managerial reputation play on a firm’s ability to acquire high quality human capital. Relying on signaling theory, we suggest that firms investing in recruitment expenses are better able to signal competence and quality to their recruits and that this will increase their ability to acquire high quality employees. Using a sample of NCAA football teams over a five-year period of time we find that recruitment expenses and organizational reputation do in fact have a direct effect on the organizations ability to acquire high quality human capital. Specifically, the results of multilevel analyses indicate that recruiting expenses predict year-by-year changes in the quality of human capital acquired and the team-level (between team) variable for current team success (organizational reputation) is a significantly better predictor of the quality of human capital acquired than the within-team variable for current team success. These findings suggest that while unstudied in the literature, recruitment expenses are, in fact, an important component in a firm’s ability to acquire high quality human capital.