Influence of human capital on firms’ and nations’ performance. A bi-disciplinary literature review

Influence of human capital on firms’ and nations’ performance. A bi-disciplinary literature review


Luís Mendes, António Nunes, Tiago Sequeira


Keywords: human capital, economic growth, firms performance


Summary: Human capital theories have been developed in the last decades. The concept has been extended to the fields of economics and management and there are now clearly different approaches between these fields. In this article we narrow the gap between these different approaches, considering the contribution of human capital to the performance of nations and firms. This an innovative bi-disciplinary study of the effects of human capital on the economic performance in the broad sense, reviewing simultaneously the literature that relates human capital to economic growth, the literature that relates human resources within the firm to firms’ performance, with special focus on the quantitative predictions of different studies. From this we draw possible paths for future research in the economics and management fields. One of the most significant paths identified is the potential of using certain new variables to be collected at the macro-level that are already used at the management level.



Aghion, P., Howitt, P. ,Appropriate Growth Policy: A Unifying Framework, “Journal of the European Economic Association”, 4(2-3), pp. 269-314, 2006.

Ahmad, S., Schroeder, R. G., The Impact of Human Resource Management Practices on Operational Performance: Recognizing Country and Industry Differences, “Journal of Operations Management”, 21(1), pp. 19-34, 2003.

Allen, N. J., Meyer, J. P., The Measurement and Antecedents of Affective, Continuance and Normative Commitment to the Organization, “Journal of Occupational Psychology”, 63, pp. 1-18, 1990.

Argote, L., Epple, D., Learning Curves in Manufacturing, “Science”, 247(4945), pp. 920-924, 1990.

Argyris, C., Schon, D. A.,Organizational Learning: A Theory of Action Perspective. Addison- Wesley, Reading, MA 1978.

Arnold, L., Growth, Welfare and Trade in an Integrated Model of Human-capital Accumulation and Research, “Journal of Macroeconomics”, 20(1), pp. 81-105, 1998.

Apergis, N., Economidou, C., Filippidis, I., International Spillovers, Human Capital and Productivity Linkages: Evidence from the Industrial Sector, “Empirica”, 36(4), pp. 365- 387, 2009.

Barney, J. B., Firm Resources and Sustained Competitive Advantage, “Journal of Management”, 17(1), pp. 99-120, 1991.

Batjargal, B., Entrepreneurial Versatility, Resources and Firm Performance in Russia: A Panel Study, “International Journal of Entrepreneurship and Innovation Management”, 5(3,4), pp. 284-297, 2005.

Becker, G. S., Human Capital: A Theoretical and Empirical Analysis, with Reference to Education. The University of Chicago Press, Chicago 1993.

Benhabib, J., Spiegel, M., The Role of Human Capital in Economic Development Evidence from Aggregate Cross-country Data, “Journal of Monetary Economics”, 34(2), pp. 143- 173, 1994.

Bils, M., Klenow P., Does Schooling Cause Growth?, “American Economic Review”, 90(5), pp. 1160-1183, 2000.

Brewster, C.,SHRM: The Value of Different Paradigms, “Management International Review”, 39(3), pp. 45-64, 1999.

Brown, S., Garino, G., Martin, C., Firm Performance and Labour Turnover: Evidence from the 2004 Workplace Employee Relations Survey, “Economic Modelling”, 26(3), pp. 689- 695, 2009.

Carmeli, A., Schaubroeck, J., How Leveraging Human Resource Capital with its Competitive Distinctiveness Enhances the Performance of Commercial and Public Organizations, “Human Resource Management”, 44(4), pp. 391-402, 2005.

Chen, Y., Chang, B., Lee, C., Organization Type, Professional Training, Manpower and Performance of Audit Firms, “International Journal of Management”, 25(2), pp. 336-347, 2008.

Colombo, M. G., Grilli, L., Founders’ Human Capital and the Growth of New Technology- based Firms: A Competence-based View. Research Policy, 34(6), pp. 795-801, 2005.

Dalgaard, C-J., Kreiner, C., Is Declining Productivity Inevitable?“Journal of Economic Growth”, 6(3), pp. 187-203, 2001.

Delaney, J. T., Huselid, M. A., The Impact of Human Resource Management Practices on Perceptions of Organisational Performance, “Academy of Management Journal”, 39(4), pp. 949-969, 1996.

Delery, J., Doty, D. H.,Modes of Theorizing in Strategic Human Resource Management: Test of Universalistic, Contingency and Configurational Performance Predictions, “Academy of Management Journal”, 39(4), pp. 802-835, 1996.

Déniz, M., De Saá, P.,A Resource-based View of Corporate Responsiveness Toward Employees, “Organization Studies”, 24(2), pp. 299-319, 2003.

Engelbrecht, H-J., Human Capital and Economic Growth: Cross-Section Evidence for OECD Countries, “Economic Record”, 79 (Special issue), S40-S51, 2003.

Friedman, B., Hatch, J., Walker, D. M., Delivering on the Promise: How to Attract, Manage and Retain Human Capital. The Free Press, New York 1998.

Gates, S., Langevin, P., Human Capital Measures, Strategy, and Performance: HR Managers’ Perceptions, “Accounting, Auditing & Accountability Journal”, 23(1), pp. 111-132, 2010.

Glaeser, E., Why Does Schooling Generate Economic Growth?, “Economics Letters”, 44(3), pp. 333-337, 1994.

Gómez, M., Duplication Externalities in an Endogenous Growth Model with Physical Capital, Human Capital and R&D, “Economic Modelling”, 28(1-2), pp. 181-187, 2011.

Gooderham, P., Parry, E., Ringdal, K., The Impact of Bundles of Strategic Human Resource Management Practices on the Performance of European Firms, “The International Journal of Human Resource Management”, 19(11), pp. 2041-2056, 2008.

Grant, R. M., The Resource-Based Theory of Competitive Advantage: Implications for Strategy Formulation, “California Management Review”, 33(3), pp. 114-135, 1991.

Grossman, G., Helpman E., Innovation and Growth in the Global Economy. MIT Press, Cambridge 1991.

Grund, C., Westergaard-Nielsen, N., Age Structure of the Workforce and Firm Performance, “International Journal of Manpower”, 29(5), pp. 410-422, 2008.

Guest, D. E., Hoque, K.,The Good, the Bad and the Ugly: Human Resource Management in New Non-union Establishments, “Human Resource Management Journal”, 5(1), pp. 1-14, 1994.

Hart, S. L., A Natural-Resource-Based View of the Firm, “The Academy of Management Review”, 20(4), pp. 986-1014, 1991.

Hatch, N. W., Dyer, J. H., Human Capital and Learning as a Source of Sustainable Competitive Advantage, “Strategic Management Journal”, 25(12), pp. 1155-1178, 2004.

Hitt, M., Bierman, L., Shimizu, K., Kochhar, R.,Direct and Moderating Effects of Human Capital on Strategy and Performance in Professional Service Firms: A Resource Based Perspective, “Academy of Management Journal”, 44(1), pp. 13-28, 2001.

Horowitz, S. A., Sherman, A., A Direct Measure of the Relationship Between Human Capital and Productivity, “Journal of Human Resources”, 15(1), pp. 67-76, 1980.

Huselid, M. A., The Impact of Human Resource Management Practices on Turnover, Productivity, and Corporate Financial Performance, “Academy of Management Journal”, 38(3), pp. 635-672, 1995.

Hwang, I.-S., Chi, D.-J., Relationships among Internal Marketing, Employee Job Satisfaction and International Hotel Performance: An Empirical Study, “International Journal of Management”, 22(2), pp. 285-293, 2005.

Jones, B., The Knowledge Trap: Human Capital and Development Reconsidered. National Bureau of Economic Research: Working-Paper, 13148, 2008.

Kalemli-Ozcan, S., Ryder, H., Weil, D., Mortality Decline, Human Capital Investment and Economic Growth, “Journal of Development Economics”, 62(1), pp. 1-23, 2000.

Keiningham, L., Aksoy, L., Daly, R. M., Perrier, K., Solom, A., Re-examining the Link Between Employee Satisfaction and Store Performance in a Retail Environment, “International Journal of Service Industry Management”, 17(1), pp. 51-57, 2006.

Kriechel, B., Pfann, G., The Role of Specific and General Human Capital after Displacement, “Education Economics”, 13(2), pp. 223-236, 2005.

Krueger, D., Kumar, K., Skill-Specific rather than General Education: A Reason for US- Europe Growth Differences?“Journal of Economic Growth”, 9(2), pp. 167-207, 2004.

Lee, F.-H., Lee, T.-Z., Wu, W.-Y.,The Relationship between Human Resource Management Practices, Business Strategy and Firm Performance: Evidence from the Steel Industry in Taiwan, “The International Journal of Human Resource Management”, 21(9), pp. 1351- 1372, 2010.

Lengnick-Hall, C., Lengnick-Hall, M., Strategic Human Resource Management: A Review of the Literature and a Proposed Typology, “Academy of Management Review”, 13(3), pp. 454-470. Lim, L., Chan, C., Dallimore, P., Perceptions of Human Capital Measures: From Corporate Executives and Investors, “Journal of Business and Psychology”, 25(4), pp. 673-688, 2010.

Lin, K. J., Wang, M. L., The Classification of Human Capital According to the Strategic Goals of Firms: An Analysis, “International Journal of Management”, 22(1), pp. 62-70, 2005.

Lucas, R., On the Mechanics of Economic Development, “Journal of Monetary Economics”, 22(1), pp. 3-42, 1988.

Mankiw, G., Romer, D., Weil, D.,A Contribution to the Empirics of Economic Growth, “Quarterly Journal of Economics”, 107(2), pp. 407-437, 1992.

Martín-Alcázar, F., Romero-Fernández, P. M., Sánchez-Gardey, G.,Strategic Human Resource Management: Integrating the Universalistic, Contingent, Configurational and Contextual Perspectives, “The International Journal of Human Resource Management”, 16(5), pp. 633-659, 2005.

Mauro L., Carmeci G., Long Run Growth and Investment in Education: Does Unemployment Matter, “Journal of Macroeconomics” 25(1), pp. 123-137, 2003.

McElroy, J.C., Morrow, P. C., Rude, S. N., Turnover and Organizational Performance: A Comparative Analysis of the Effects of Voluntary, Involuntary, and Reduction-in-force Turnover, “Journal of Applied Psychology”, 86(6), pp. 1294-1299, 2001.

Meier, K. J., Hicklin, A., Employee Turnover and Organizational Performance: Testing a Hypothesis from Classical Public Administration, “Journal of Public Administration Research and Theory”, 18(4), pp. 573-590, 2008.

Mengistae, T., Competition and Entrepreneurs’ Human Capital in Small Business Longevity and Growth, “The Journal of Development Studies”, 42(5), pp. 812-836, 2006.

Meyer, J.P., Allen, N. J., Smith, C.A., Commitment to Organizations and Occupations: Extension and Test of a Three-component Conceptualization, “Journal of Applied Psychology”, 78(4), pp. 538-551, 1993a.

Meyer, A.D., Tsui, A. S., Hinings, C. R., Configurational Approaches to Organizational Analysis, “Academy of Management Journal”, 36(6), pp. 1175-1195, 1993b.

Mincer, J., Schooling, Experience and Earnings. Columbia University Press, New York 1974. Morales, C., Marquina, P., Evidence on the Role of Age in Team Performance. A Comparative

Study in Peru and Spain, “Employee Relations”, 31(3), pp. 264-275, 2009.

Nebeker, D., Busso, L., Werenfels, P. D., Diallo, H., Czekajewski, A., Ferdman, B., Airline Station Performance as a Function of Employee Satisfaction, “Journal of Quality Management”, 6(1), pp. 29-45, 2001.

Olomolaiye, P.O., An Evaluation of the Relationships between Bricklayers’ Motivation and Productivity, “Construction Management & Economics”, 8(3), pp. 301-313, 1990.

Pena, I., Intellectual Capital and Business Start-up Success, “Journal of Intellectual Capital”, 3(2), pp. 180-198, 2002.

Peteraf M., The Cornerstone of Competitive Advantage: A Resource-based View,“Strategic Management Journal”, 14(3), pp. 179-191, 1993.

Pfeffer, J., Competitive Advantage Through People: Unleashing the Power of the Workforce.

Harvard Business School Press, Boston 1994.

Pfeffer, J., Seven Practices of Successful Organizations, “California Management Review”, 40(2), pp. 96-124, 1998.

Ployhart, R. E., Moliterno, T. P., Emergence of the Human Capital Resource: A Multilevel Model, “The Academy of Management Review”, 36(1), pp. 127-150, 2011.

Porter, L. W., Steers, R. M., Organisational, Work, and Personal Factors in Employee Turnover and Absenteeism, “Psychological Bulletin’ 80(2), pp. 151-176, 2011.

Prasada Rao, Y.V.S.S.S. V., Motivation Model for Improving Productivity in a Manufacturing Unit – A Success Story, “International Journal of Productivity and Performance Management”, 55(5), pp. 430-436, 2006.

Pritchard, M., Silvestro, R., Applying the Service Profit Chain to Analyse Retail Performance: The Case of the Managerial Strait-jacket?, “International Journal of Service Industry Management”, 16(3/4), pp. 337-356, 2005.

Rashid, M.Z. A., Sambasivan, M., Johari, J., The Influence of Corporate Culture and Organisational Commitment on Performance, “Journal of Management Development”, 22(8), pp. 708-728, 2003.

Rebelo, S.,Long-Run Policy Analysis and Long-Run Growth, “Journal of Political Economy”, 99(3), pp. 500-521, 1991.

Reichheld, F.,The Loyalty Effect. Harvard Business School, Cambridge, Mass. 1996.

Reis, A. B., Sequeira, T. N., Human Capital and Overinvestment in R&D, “Scandinavian Journal of Economics”, 109(3), pp. 573-591, 2007.

Roca-Puig, V., Beltrán-Martín, I., Escrig-Tena, A. B., Bou-Llusar, J. C., Organizational Commitment to Employees and Organizational Performance: A Simultaneous Test of Configurative and Universalistic Propositions, “Personnel Review”, 36(6), pp. 867-886, 2007.

Rodrigues, A. P., Pinho, J. C., Market Orientation, Job Satisfaction, Commitment and Organisational Performance: The Specific Case of Local Public Sector, “Transforming Government: People, Process and Policy”, 4(2), pp. 172-192, 2010.

Rogers, M., Directly Unproductive Schooling: How Country Characteristics Affect the Impact of Schooling on Growth, “European Economic Review”, 52(2), pp. 356-385, 2008.

Russell, J. S., Terborg, J. R., Powers, M. L., Organizational Performance and Organizational Level Training and Support, “Personnel Psychology”, 38(4), pp. 849-863, 1985.

Saénz, J., Human Capital Indicators, Business Performance and Market-to-Book Ratio,“Journal of Intellectual Capital”, 6(3), pp. 374-384, 2005.

Saffu, K., Apori, S. O., Elijah-Mensah, A., Ahumatah, J., The Contribution of Human Capital and Resource-based View to Small- and Medium-sized Tourism Venture Performance in Ghana, “International Journal of Emerging Markets”, 3(3), pp. 268-284, 2008.

Sapienza, H. J., Grimm, C. M.,Founder Characteristics, Start-up Processes, and Strategy/Structure Variables as Predictors of Shortline Railroad Performance,“Entrepreneurship Theory and Practice”, 22(1), pp. 5-24, 1997.

Segal, G., Borgia, D., Schoenfeld, J., Founder Human Capital and Small Firm Performance: An Empirical Study of Founder-managed Natural Food Stores, “Journal of Management and Marketing Research”, 4(1), pp. 1-10, 2010.

Seleim, A., Ashour, A., Bontis, N., Human Capital and Organizational Performance: A Study of Egyptian Software Companies, “Management Decision”, 45(4), pp. 789-801, 2007. Sequeira, T. N., Human Capital Composition, Growth and Development: An R&D Growth

Model versus Data, “Empirical Economics”, Vol. 32(1), pp. 41-65, 2007.

Sequeira, T. N., On the Effects of Human Capital and R&D Policies in an Endogenous Growth Model, “Economic Modelling”, 25(5), pp. 968-982, 2008.

Sequeira, T. N., On the Relationship between Education and Country-Risk: A New Fact, “Acta Oeconomica”, 59(4), pp. 441-454, 2009.

Sequeira, T. N., Ferraz, N., Is Education Prejudiced by Risk?“Economic Record”, 85(270), pp. 307-317, 2009.

Sequeira, T. N., Martins, E., Education Public Financing and Economic Growth: An Endogenous Growth Model versus Evidence, “Empirical Economics”, 35(2), pp. 361-377, 2008.

Sequeira, T. N., Reis, A. B.,Human Capital Composition, R&D and the Increasing Role of Services.Topics in Macroeconomics, “The Berkeley Journals in Macroeconomics”, 6(1), Article 12, 2006.

Shiu, Y. M., Yu, T. W., Internal Marketing, Organisational Culture, Job Satisfaction, and Organisational Performance in Non-life Insurance, “The Service Industries Journal”, 30(6), pp. 793-809, 2010.

Silvestro, R., Dispelling the Modern Myth: Employee Satisfaction and Loyalty Drive Service Profitability, “International Journal of Operations & Production Management”, 22(1), pp. 30-49, 2002.

Snell, S. A., Dean, J. W., Integrated Manufacturing and Human Resource Management: A Human Capital Perspective, “Academy of Management Journal”, 35(3), pp. 467-504, 1992.

Steiner, M. P., Solem, O., Factors for Success in Small Manufacturing Firms, “Journal of Small Business Management”, 26(1), pp. 51-56, 1988.

Steyrer, J., Schiffinger, M., Lang, R.,Organizational Commitment – A Missing Link between Leadership Behavior and Organizational Performance?“Scandinavian Journal of Management”, 24(4), pp. 364-374, 2008.

Switzer, L.N., Huang, Y., How Does Human Capital Affect the Performance of Small and Mid-cap Mutual Funds?, “Journal of Intellectual Capital”, 8(4), pp. 666-681, 2007.

Temple, J., The New Growth Evidence, “Journal of Economic Literature”, 37(1), pp. 112-156, 1999.

Theriou, G. N., Chatzoglou, P. D., Exploring the Best HRM Practices-performance Relationship: An Empirical Approach, “Journal of Workplace Learning”, 21(8), pp. 614- 646, 2009.

Ton, Z., Huckman, R. S.,Managing the Impact of Employee Turnover on Performance: The Role of Process Conformance, “Organization Science”, 19(1), pp. 56-68, 2008.

Tsai, C., Hung, M., Harriot, K., Human Capital Composition and Economic Growth. Social Indicators Research, DOI 10.1007/s11205-009-9565-z, 2010.

Vroom,  V.  H.,  Manage People, Not  Personnel:  Motivation  and  Performance  Appraisal.

Harvard Business Review, Boston 1990.

Wang, I., Shieh, C., Wang, F., Effect of Human Capital Investment on Organizational Performance, “Social Behavior and Personality”, 36(8), pp. 1011-1022, 2008.

Wernerfelt, B.,A Resource-Based View of the Firm, “Strategic Management Journal”, 5(2), pp. 171-180, 1984.

Wright, P.M, Dunford, B. B., Snell, S. A., Human Resources and the Resource-Based View of the Firm, “Journal of Management”, 27(6), pp. 701-721, 2001.

Youndt, M.A., Snell, S.A., Dean, J. W., Jr., Lepak, D. P., Human Resource Management, Manufacturing Strategy, and Firm Performance, “Academy of Management Journal”, 39(4), pp. 836-866, 1996.

Zeng, J., Reexamining the Interaction between Innovation and Capital Accumulation, “Journal of Macroeconomics”, 25(4), pp. 541-560, 2003.

Zhou, K. Z., Li, J. J., Zhou, N., Su, C.,Market Orientation, Job Satisfaction, Product Quality, and Firm Performance: Evidence from China, “Strategic Management Journal”, 29(9), pp. 985-1000, 2008.


Download PDF

Read 2183 times Last modified on Saturday, 01 March 2014 15:49