The effect of human capital on regional financial conditions through cultural capital of employees

Abstract

Purpose

This paper aims to discuss about whether human capital and cultural capital affect the financial condition of a region and whether cultural capital has a mediating effect (mediator) on the effect of human capital on the financial condition of a region. Moreover, this research also refines previous research by combining the simultaneous effect of the variables human capital and cultural capital on the financial condition of a region and examining the mediating effect of the variable cultural capital.

Design/methodology/approach

Research was conducted at the Regional Apparatus Work Unit (SKPD) in the Area of South Sulawesi Province with a total population of up to 630. The inferential statistical analysis using the method of variance-based structural equation modeling (SEM) is known as partial least squares SEM.

Findings

Human capital has positive influence on cultural capital. The higher human capital, primarily reflected in the work experience, will result in increasing the capital of culture in the working environment of local government in the province of South Sulawesi.

Originality/value

Originality of this paper is as follows: an inferential method used in this research is an SEM. The location of the research located in of the Regional Apparatus Work Unit (SKPD) in the Area of South Sulawesi Province, Indonesia, Indonesia which there has not been research by the methods and the same location.

Citation

Nirwana, N. (2018), "The effect of human capital on regional financial conditions through cultural capital of employees", International Journal of Law and Management, Vol. 60 No. 4, pp. 965-978. https://doi.org/10.1108/IJLMA-03-2017-0042