Human Capital Intensity Research Articles

How Productivity, Capital Investment, Employment, Human Capital and Energy Are Affecting Economic Growth in Morocco? An ARDL, FMOLS, DOLS and CCR Approaches

Abstract This paper aims to scrutinize the effects of; productivity, capital investment, human capital, employment and energy intensity; on economic growth in Morocco under the Energy-augmented Cobb Douglas production function (CDPF) framework, using extended data from 1965 to 2022. The ADF unit root test confirmed the existence of cointegration among variables, then, the ARDL BTA/ECM model proved the presence of long-term relationship within, in which the explanatory variables progress all together positively and proportionally to generate economic growth, just as stipulate the standard CDPF. The outputs reliability was validated by FMOLS, DOLS, and CCR tests. Results implies that an additional unit in GDP corresponds, in terms of units to, 1.87 in productivity level, 0.12 in capital investment, 4.19 in of human capital, 0.98 in labor force and 2.52 in energy intensity, that Moroccan economy is human capital intensive unlike when it comes to physical capital. In the light of this findings, we think that Morocco should accelerate its industrial transition, proceed to a large modernization and mechanisation of its agriculture in order to inspire more productivity to its entire economy, keep acting in the sense of more structural reforms to improve the business environment, share out the public spending equitably following two dimensions, physical by upgrading local infrastructure to attract more investments, human by promoting human capital through education and social protection.

Human capital and trademarks: Evidence from higher education expansion in China

This paper investigates how human capital affects trademark applications at the firm level. We adopt a difference-in-differences strategy to examine the impact of human capital on trademark applications, taking advantage of a unique natural experiment in China that expanded higher education enrollment substantially in 1999. We find firms in industries with higher human capital intensities filed for more trademarks after 2003 than they did in prior years. We then investigate the mechanism through which human capital enhancement causes more trademark applications. We find that firms in industries with higher human capital intensities tend to invest more in R&D and worker training programs. We next find that firms that spend more on R&D and training programs tend to develop more new products. We also find firms that have more new products file for more trademark applications. The main policy implication of our empirical results is that encouraging human capital enhancement can generate more innovative products and trademarks.

The bigger, the better? Optimal NGO size of human resources and governance quality of entrepreneurship in circular economy

PurposeThe paper sets out to understand the key issues that the various functions and optimal allocation of NGOs (non-governmental organizations) in the circular economy that provide public services depend not only on external quantities or densities but also on their internal size of human resources.Design/methodology/approachThe paper uses different data samples and models to study the influence mechanism of optimal NGO size of human resources and its differentiated effects on governance quality of entrepreneurship.FindingsThe authors find that a reduction in transaction costs and an increase in the aggregation degree of public demand lead to increased human capital and lower financial capital intensity. In addition, the authors find that NGO size of human resources has a relationship that is approximately U-shaped (or inverse U-shaped) with the governance quality of entrepreneurship.Practical implicationsThe paper discusses the implications for programs that encourage NGOs to optimally determine their internal size of human resources and further improve the governance quality of entrepreneurship in the circular economy.Originality/valueThe paper reveals the significant nonmonotonic relationship between local governance quality and NGO financial size, even after controlling for other NGO, city and provincial characteristics.

The impact of international talent on environmental pollution: Firm-level evidence from China

Environmental pollution affects people's quality of life and health. Improving environmental awareness and developing green technologies are the key measures to solve the pollution problem. Combining the pollution emission database of Chinese industrial enterprises and the survey data on the scale of international talent inflow, we empirically test the impact of international talent influx on corporate pollution emission behavior and its influence channels. We have found that increasing the scale of international talent inflow significantly reduced the intensity of corporate pollution emissions, and the potential channels are to promote corporate technological progress, improvement of environmental protection concept, and export higher-quality products. Heterogeneity analysis found that the inflow of international talents has a significant inhibitory effect on the pollution emission intensity of enterprises in high human capital intensity and high pollution intensity industries, and talents from developed countries are more conducive to reducing the pollution emission intensity of enterprises. This paper proves that attracting international talents is an effective way to improve environmental pollution and achieve green and sustainable development.

Confucianism and employee stock ownership plans: Evidence from Chinese listed firms

We investigate whether Confucian culture affects the adoption of employee stock ownership plans (ESOPs). Using data from a sample of Chinese A-share listed firms between 2014 and 2020, we find that Confucianism promotes firms to adopt ESOPs. This effect is concentrated in firms with high human capital intensity, intense industry competition, and less foreign culture influence. Further analysis reveals that stronger Confucian influence leads to longer lock-up periods, more employees holding, larger actual fund size, and more shares per employee for ESOPs. Finally, we suggest that by trigging ESOPs, Confucianism enhances firm value. This study highlights the importance of culture for employee incentives and extends our understanding of ESOP determinants.

FinTech in the financial system: Towards a capital-intensive and high competence human capital reality?

Digital transformation has generated a multifaceted shift in the financial industry through financial technology (FinTech). This study focuses on the effect that a series of the most impactful technological tools adopted by banks have on their business model, with a special focus on the evolution of human capital and traditional capital intensity in the sector. To our knowledge, the latter represents a gap in current intellectual capital literature that our paper aims to fill by investigating the impact of digital transformation on human capital efficiency and intensity in the European banking system. Our data on 1,250 banks in the European Union suggest the banking sector is going through a transformation of its very core business model, further translated into improved efficiency and profitability. Evidence highlights a shift of banking institutions towards a more capital-intensive model, contradicting centuries-old business traditions, as well as a simultaneous rise in the competency level and intensity of highly qualified human capital that shape the new model.

Regional static diversification and relatedness between industries

Abstract Relatedness has often been shown to have a central role in regional diversification. Knowledge flows between related industries are an important source of innovation, leading to industry growth and the establishment of new industries. Earlier studies have focused on dynamic diversification into new industries, but in this study, we emphasize static diversification, that is, changes in the balance between existing industries in a region. We use linked employer–employee data from Denmark and construct a range of measures at the level of regional industries. The role of relatedness in static diversification 2008–2013 is then analyzed based on industry characteristics in 2008. We find that relatedness plays a more important role in regions that are either spatially peripheral or economically non-peripheral, while relatedness has no relationship to static diversification on average. In addition to the empirical result, we contribute by comparing indices of relatedness, suggesting an alternative employment-weighted index, and conceptualizing relatedness as itself a disparity dimension of diversity. We finally ask how static and dynamic diversification affect disparity. We find that human capital intensity plays an important role in the link between diversification and the evolution of disparity.

Does Human Capital Homogeneously Improve the Corporate Innovation: Evidence from China’s Higher Education Expansion in the Late 1990s

The effect of human capital on corporate innovation varies with the distribution of human capital intensity among industries. To analyze this heterogenous effect, we utilized the variation of college enrollment expansion across different regions in China as an exogenous human capital shock. Using a sample of Chinese industrial enterprises from 1998 to 2008 and the difference-in-difference strategy, we found that industries with intensive human capital significantly increase the number of patent applications after the expansion policy. The effect is pronounced in invention patents and significantly positive in exporting and capital-intensive corporates. As for the channels, corporates in these industries are apt to adopt new technologies and increase R&D expenditures. Moreover, the agglomeration of new graduates accelerates knowledge spillover, thus promoting innovation in knowledge-intensive industries. In sum, this paper verifies the importance of policy intervention on skilled labor supply towards corporate innovation and supports the talent introduction plan of local government in China.

Trade Specialisation and Changing Patterns of Comparative Advantages in Manufactured Goods

Starting from the late 1950s, mainly as a reaction to Leontief’s paradoxical results, a large amount of research has underlined the great importance of technology and human capital in explaining international trade in manufactures. This study examines the patterns of comparative advantages for 42 countries and 91 manufactured classes of final and intermediate products and their changes between 2001 and 2019. The dynamics and the effects of the international fragmentation of production processes are also considered. Comparative advantages in each class of products are related to three different measures of a country’s human capital or technology endowment: the cost of labour, the level of formal education and the number of patents per capita. An indicator of home market size enters the model as a control variable. The econometric analysis reveals that in 2019, human capital or technology endowments explain comparative advantages in 70 out of 91 products. In particular, 31 products are positively and significantly associated with at least 1 of the 3 human capital or technology indicators, 34 products are negatively and significantly linked to at least 1 indicator, 5 products show contrasting results, 21 products are not related to any human capital or technology indicator. Between 2001 and 2019, comparative advantages for 15 classes of products shifted towards lower-technology countries and for 18 productions towards higher-technology countries. There were no shifts for 51 products. From a policy perspective, the distinction between high and low-technology productions could have some interesting implications. Since high-technology productions are characterised by a higher learning-by-doing rate, governments should foster domestic firms to upgrade the human capital or technology intensity of their productions.

The Differences in Human Capital and Earnings in Indonesia dan Malaysia

This study examines the mobility of labor and capital in Indonesia and Malaysia as two neighboring countries that have similarities in the language, culture, and beliefs of the majority population. This study uses population-based data used in the analysis derived from various registers managed by the central statistical agency in both Indonesia and Malaysia. By matching unique personal identification codes across censuses and registers, the data provides detailed information about individuals, including their education, income, labor market status, and location of residence and place of work during the period 1992–2020. We found that the convergence of human capital intensity across functional labor market (LMR) areas, both in Indonesia and Malaysia, is not significant. The pattern of income disparities between regions in Indonesia and Malaysia is almost the same. Inequality in human capital between core economic and rural areas in the functional labor market persists in Indonesia as well as in Malaysia.

Temporary Employment, Precarity Trap in Low-paying Jobs, and Wage Inequality

This study examines the association between temporary employment incidence and wage inequality by focusing on the asymmetric distribution of temporary employment across different wage layers, specifically its high concentration in lower-level deciles. We argue that a high share of low-wage jobs in total temporary employment leads to rent destruction in low-paying jobs, shifting rent allocation vertically from low to high earners, thus increasing wage inequality. We also hypothesize that the rent-shifting process is subject to some moderating factors. Specifically, we expect the effect to be amplified in industries with greater human-capital intensity and a smaller probability of temporary workers’ transition to permanent jobs, while being less pronounced in industries with greater concentration of large firms. We test our predictions with data on wages of a representative sample of the Spanish labor force, extracted from administrative linked employer-employee datasets, which include 784,206 individuals from 2006 to 2018 (total N=4,967,236 person-year observations). Employing heteroscedastic models that simultaneously examine the effects of both micro and macro-level covariates on within-industry wage variance, we find the expected positive association between the ratio of total temporary employment that is occupied by low-paying jobs and wage inequality at the industry-region-year level. The results also support our moderation hypotheses. Building on and advancing market-based and rent-destruction accounts of evolving employment practices, we introduce the ratio of temporary employment occupied by low-wage jobs as a structural source of wage inequality and discuss its theoretical and practical implications.

Understanding territorial innovations in European regions: Insights from radical and incremental innovative firms

AbstractInnovation is widely considered to be a key driver of regional economic growth and resilience. Economic openness, research and development (R&D), public support, absorptive intensity, human capital and innovation cooperation are known to produce spill‐over effects on regional innovations and growth. Several studies within individual European countries have shown different results from these activities. The same is true for firms’ approaches to innovations (open versus closed or radical versus incremental innovation). Using the Community Innovation Survey datasets, we analysed 1,820 firms from ten European countries to assess the factors that significantly influence innovative outputs from the perspective of radical and incremental small and medium‐sized enterprises (SMEs) and large firms. The results emphasize the significance of human capital intensity, suggesting that both incremental and radical innovative firms in these regions are effective in absorbing new knowledge that improves new product development. On the other hand, surprisingly, our results contradict previous assumptions about the importance of innovation cooperation and demonstrate the lack of significance in most of the collaboration activities, signifying some extent of unviability in R&D cooperation in both radical and incremental innovating SMEs and large firms. This study has theoretical and practical implications for regional innovation policies in these regions.

Marriage to the Same Kind: Organizational Political Ideology and Mergers and Acquisitions

This study contributes to the growing literature on organizational political ideology by positing that acquiring firms choose targets with similar organizational political ideology in their effort to retain employees post-merger. Using a sample of M&A announcements in the United States from 1996 to 2014, we find a positive relationship between the similarity of political ideologies of the merging organizations and the likelihood of M&A announcement. In addition, we find that our main relationship is stronger the more homogeneous the organizational political ideology of the acquirer, and the more the human capital intensity of the merging firms. In addition, we find support for the proposed mechanism that drives the main relationship. We thus introduce the concept of organizational political ideology into the debate over the influence of organizational values in M&As, and we extend the theoretical application of political ideology to settings with inter-organizational partnerships.

On the origins of entrepreneurship: Evidence from sibling correlations

Despite the consensus that entrepreneurship runs in the family, we lack evidence regarding the total importance of family and community background, as well as the relative importance of different background influences that affect entrepreneurship. We draw on human capital formation theories to argue that families and communities provide a salient context for the development of individual entrepreneurial skills and preferences, beyond the existing focus on parental entrepreneurship. We posit that early influences are more important than later influences and propose a hierarchy of family influences, whereby genes have the largest explanatory power, followed by parental entrepreneurship, neighborhoods, and parental resources, and finally by parental immigration, family structure, and sibling peers. Finally, we argue that the higher human and financial capital intensity of incorporated relative to unincorporated entrepreneurship predictably alters the hierarchy of family influences, as does gender. Sibling correlations estimated on Swedish register data confirm our hypotheses.

A Human Capital Theory of Structural Transformation

The paper presents a human capital based theory of the sectoral transformation along the balanced growth path equilibrium. Allowing a small upward trend in the productivity of the human capital sector, combined with differential human capital intensity and constant productivity across sectors, output gradually shifts over time from relatively less human capital intensive sectors towards more human capital intensive sectors. Sectors intensive in the factor that is becoming relatively more plentiful find their relative prices falling, their effective productivities rising at differential rates inversely to their relative price decline, and their relative outputs expanding. Adding more sectors of greater human capital intensity causes labor time to decrease across existing sectors, and by relatively more in the least human capital sectors.

Tourism and electricity consumption in 9 European countries: a decomposition analysis approach

ABSTRACT Tourism is a major economic activity constituting one of the main sectors in economic terms. European countries traditionally play a significant role in the overall international tourism flow. However, while tourism has a noticeable positive impact on economic development, it also contributes to environmental degradation by increasing energy consumption and therefore emissions. This paper analyses the relationships between Hotel and Restaurant electricity consumption and tourism growth in 9 European countries during 2004–2012, for which there is a sufficient amount of data available. A decomposition analysis based on log-mean Divisia index method (LMDI I) is conducted to examine electricity consumption on this sector and their components. Five decomposition factors are considered: energy intensity (EI), physical capital intensity (KI), physical and human capital relationship (KL), human capital intensity (LI) and the tourism factor (T). Results show the evolution of energy consumption related to this sector, identifying the driving forces that have influenced it.

Entrepreneurship and Wage Inequality: The Indirect Effect on Incumbents

Using an exogenous variation in entry barriers, we develop and test a theory of wage inequality due to higher levels of startup entry. Researchers have argued that startups generate greater inequality in the labor market because new ventures lead to a higher within- and between-firm dispersion of wages. We propose an alternative explanation: a competitive response of incumbent firms to the threat of talent loss. When threatened by startup entry, incumbents will reallocate rewards among their own workers to prevent the loss of valuable employees to newly founded firms, thus generating greater wage inequality. We exploit a natural experiment provided by deregulation in Portugal and its effect on wage inequality between 1995 and 2009. Using a difference-in-differences methodology we find that, following an exogenous rise in the threat of startup entry, wage inequality increased. This threat further resulted in wider disparities in wages between high and low earners, as the former experienced greater increases in their bargaining power than the latter. Finally, increases in wage inequality inside incumbent firms were amplified in industries with higher rates of mobility to startups and greater human-capital intensity.

THE DYNAMIC IMPACTS OF FINANCIAL DEVELOPMENT AND HUMAN CAPITAL ON CO2 EMISSION INTENSITY IN CHINA: AN ARDL APPROACH

This paper studies the dynamic impacts of financial development, human capital, and economic growth on CO2 emission intensity in China for the period 1978–2015, with a structural breakpoint in 1992, by employing an autoregressive distributed lag (ARDL) approach. The estimations show that there exists a long-run cointegration linkage among the variables, with three main findings. First, financial openness measured by net FDI inflows can significantly reduce CO2 emission intensity in both the short-term and the long-term, whereas the effects of both financial scale and financial efficiency are limited and insignificant. Second, there exists an inverted N-shaped relationship between human capital and CO2 emission intensity: improving human capital first decreases CO2 emission intensity (before 1992), then increases it in the short-run (after 1992), and, finally, lessens it in the long-run. Last, raising per capita income can also significantly lower CO2 emission intensity in the long-run. Accordingly, some policy implications are also discussed.

Determinants of the Adoption of Information and Communication Technologies (ICTs): the Case of Tunisian Electrical and Electronics Sector

From the second half of the 1990s, increased investment in information and communication technologies (ICTs) has led to an acceleration of productivity growth and performance in many developed and newly industrialized countries. However, less is known about the current situation of SMEs in developing countries. This article addresses this issue by questioning the drivers of advanced manufacturing ICT adoption in Tunisian SMEs operating in the Electrical and Electronics industry. By placing our analysis within the diffusion of innovation (DOI) and technology, organization, and environment (TOE) frameworks, five groups of factors (human capital, firm characteristics, strategic directions, international orientation, and environment) are proposed. Data collected from 50 manufacturing SMEs is tested using the ordered probit model. The results show that firms’ human capital, exports and imports intensities, and firm size are the most significant explanatory variables of adoption of advanced manufacturing ICTs in the Electrical and Electronics sector.

Within Gain, Structural Pain: Capital Account Liberalization and Economic Growth

This paper is the first to study the effects of capital account liberalization on structural transformation and compare the contribution of within term and structural term to economic growth. We use a 10-sector-level productivity data set to decompose the effects of opening capital account on within-sector productivity growth and cross-sector structural transformation. We find that opening capital account is associated with labor productivity and employment share increment in sectors with higher human capital intensity and external financial dependence, as well as non-trad-able sectors. But it results in a growth-reducing structural transformation by directing labor into sectors with lower productivity. Moreover, in the ten years after capital account liberalization, the contribution share of structural transformation decreases while that of within productivity growth increases. We conclude that the relationship between capital account liberalization and economic growth is within gain and structural pain.