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An Empirical Study on the Influence of Internal and External Effects of Human Capital on Business Performance

Received: 12 June 2019     Accepted: 10 July 2019     Published: 23 July 2019
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Abstract

Human resources is one of the important driving forces for the company's business performance growth; therefore, this has caused companies to pay attention to the concept of human capital and human resource management of human capital structure. For a company, the value of the company does not come entirely from physical assets, but also from intangible assets; therefore, the education and skills of employees are critical. This study selects annual data of China's 33 listed energy companies from 2012 to 2017, and uses revenue capacity and return on investment in human capital as the dependent variable, employee’s education years, educational Gini index, average employees’ compensation, average top managements’ compensation and ratio of skillful employees to total employees as the independent variables, to employ panel data methods to empirically study the impact of human capital on business performance from the perspective of internal and external effects. The empirical results show that the employee’s education years and educational Gini index in the company's internal effects have a positive impact on business performance. On the other hand the average employees’ compensation and average top managements’ compensation in the company's in the company's external effects have a positive impact on business performance. The conclusion of this study: is that human capital of Chinese listed energy companies plays an important role in business performance.

Published in Journal of Business and Economic Development (Volume 4, Issue 3)
DOI 10.11648/j.jbed.20190403.11
Page(s) 74-80
Creative Commons

This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.

Copyright

Copyright © The Author(s), 2019. Published by Science Publishing Group

Keywords

Human Capital, Business Performance, Educational Gini Index

References
[1] Becker, G. S. (1993). The economic way of looking at behavior: The Nobel Lecture. Journal of Political Economy, (101): 385-409.
[2] Becker, G. S. (1964). Human capital: A theoretical and empirical analysis with special reference to education. New York: Columbia University Press.
[3] Coleman, J. S. (1998). Social capital in the creation of human capital. American Journal of Sociology, (94): 95-120.
[4] Schultz, T. W. (1961). Investment in human capital. The American Economic Review, 51 (1), 1–17.
[5] Brooking, A. (1996). Intellectual capital: Core asset for third millennium enterprise. London: International Thomson Business Press.
[6] Pennings, J. M., Lee, K., and Witteloostuijn, A. (1998). Human capital, social capital and firm dissolution. The Academy of Management Journal, 41 (4): 425-440.
[7] Namasivayam, K. and Denizci, B. (2006). Human capital in service organizations: Identifying value drivers. Journal of Intellectual Capital, 7 (3): 381–393.
[8] Dzinkowski, R. (2000). The measurement and management of intellectual capital: An introduction. Financial Management, 78 (2): 32-36.
[9] Becker, B. E., Husield, M. A., and Ulrich, D. (2001). The HR scorecard: Linking people, strategy, and performance. Boston: Harvard Business School Press.
[10] Hillman, A. J. and Dalziel, T. (2003). Boards of directors and firm performance: Integrating agency and resource dependence perspectives. The Academy of Management Review, 28 (3): 383-396.
[11] Teixeira, A. A. C. and Queiros A. S. S. (2015). Economic growth, human capital and structural change: A dynamic panel data analysis. Research Policy, 45 (8), 1636-1648.
[12] Maas, J. V. L. and Criel, G. (1982). Distribution of primary school enrollments in Eastern Africa [J]. World Bank Staff Working Papers Number 511.
[13] Ballot, G., Fakhfakh F. and Taymaz, E. (2001). Firms’ human capital, R&D and performance: A study on French and Swedish firms. Labour Economics, 8 (4): 443-462.
[14] Peng, Y., Suying, G., Long, X. (2017). The influence of human capital and employee human capital on firm performance: An analysis of the mediating effect of adjustment. Journal of Technology Economics and Management, (4): 52-58.
[15] Fedyk, A. and Hodson, J. (2017). Trading on talent: Human capital and firm performance. Working paper.
Cite This Article
  • APA Style

    Wenjie Yang, Shun-Ho Chu, Zhe Liu. (2019). An Empirical Study on the Influence of Internal and External Effects of Human Capital on Business Performance. Journal of Business and Economic Development, 4(3), 74-80. https://doi.org/10.11648/j.jbed.20190403.11

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    ACS Style

    Wenjie Yang; Shun-Ho Chu; Zhe Liu. An Empirical Study on the Influence of Internal and External Effects of Human Capital on Business Performance. J. Bus. Econ. Dev. 2019, 4(3), 74-80. doi: 10.11648/j.jbed.20190403.11

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    AMA Style

    Wenjie Yang, Shun-Ho Chu, Zhe Liu. An Empirical Study on the Influence of Internal and External Effects of Human Capital on Business Performance. J Bus Econ Dev. 2019;4(3):74-80. doi: 10.11648/j.jbed.20190403.11

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  • @article{10.11648/j.jbed.20190403.11,
      author = {Wenjie Yang and Shun-Ho Chu and Zhe Liu},
      title = {An Empirical Study on the Influence of Internal and External Effects of Human Capital on Business Performance},
      journal = {Journal of Business and Economic Development},
      volume = {4},
      number = {3},
      pages = {74-80},
      doi = {10.11648/j.jbed.20190403.11},
      url = {https://doi.org/10.11648/j.jbed.20190403.11},
      eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.jbed.20190403.11},
      abstract = {Human resources is one of the important driving forces for the company's business performance growth; therefore, this has caused companies to pay attention to the concept of human capital and human resource management of human capital structure. For a company, the value of the company does not come entirely from physical assets, but also from intangible assets; therefore, the education and skills of employees are critical. This study selects annual data of China's 33 listed energy companies from 2012 to 2017, and uses revenue capacity and return on investment in human capital as the dependent variable, employee’s education years, educational Gini index, average employees’ compensation, average top managements’ compensation and ratio of skillful employees to total employees as the independent variables, to employ panel data methods to empirically study the impact of human capital on business performance from the perspective of internal and external effects. The empirical results show that the employee’s education years and educational Gini index in the company's internal effects have a positive impact on business performance. On the other hand the average employees’ compensation and average top managements’ compensation in the company's in the company's external effects have a positive impact on business performance. The conclusion of this study: is that human capital of Chinese listed energy companies plays an important role in business performance.},
     year = {2019}
    }
    

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    AU  - Wenjie Yang
    AU  - Shun-Ho Chu
    AU  - Zhe Liu
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    DO  - 10.11648/j.jbed.20190403.11
    T2  - Journal of Business and Economic Development
    JF  - Journal of Business and Economic Development
    JO  - Journal of Business and Economic Development
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    PB  - Science Publishing Group
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    UR  - https://doi.org/10.11648/j.jbed.20190403.11
    AB  - Human resources is one of the important driving forces for the company's business performance growth; therefore, this has caused companies to pay attention to the concept of human capital and human resource management of human capital structure. For a company, the value of the company does not come entirely from physical assets, but also from intangible assets; therefore, the education and skills of employees are critical. This study selects annual data of China's 33 listed energy companies from 2012 to 2017, and uses revenue capacity and return on investment in human capital as the dependent variable, employee’s education years, educational Gini index, average employees’ compensation, average top managements’ compensation and ratio of skillful employees to total employees as the independent variables, to employ panel data methods to empirically study the impact of human capital on business performance from the perspective of internal and external effects. The empirical results show that the employee’s education years and educational Gini index in the company's internal effects have a positive impact on business performance. On the other hand the average employees’ compensation and average top managements’ compensation in the company's in the company's external effects have a positive impact on business performance. The conclusion of this study: is that human capital of Chinese listed energy companies plays an important role in business performance.
    VL  - 4
    IS  - 3
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Author Information
  • School of Business, Lingnan Normal University, Zhanjiang, China

  • School of Business, Macau University of Science and Technology, Macau, China

  • School of Business, Macau University of Science and Technology, Macau, China

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