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Book part
Publication date: 15 September 2017

Xiaojun Yang and Wei-chiao Huang

This paper examines the impact of residents’ human capital investment inequality on the urban–rural income gap, using China’s provincial panel data from 1997 to 2013. The…

Abstract

This paper examines the impact of residents’ human capital investment inequality on the urban–rural income gap, using China’s provincial panel data from 1997 to 2013. The results show that, at the national level as well as at the regional level, residents’ overall human capital investment inequality has a positive significant impact on the urban–rural income gap. In addition, the impact of overall human capital investment inequality increased monotonically from the eastern region inward to the western region. In terms of the relative impact of each component of human capital investment inequality on the urban–rural income gap, migration investment inequality appears to have the greatest impact at the national level, whereas health investment inequality has the greatest impact on the urban–rural income gap in the eastern region, and education investment inequality exhibits the greatest impact in the central and western regions. We also investigate the impact of human capital investment inequality on the urban–rural income gap over different periods. The results show that residents’ overall human capital investment inequality had a positive impact on the urban–rural income gap in the period 1997–2008, but the impact rapidly shrunk in 2009–2013. Furthermore, the impact of residents’ health investment inequality on the urban–rural income gap shows a downward trend, and the impact of residents’ education investment inequality trended slightly upward from 1997 to 2008, and then rapidly shrunk in 2009–2013. Finally, the impact of residents’ migration investment inequality was only significant in 1997–2002.

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Advances in Pacific Basin Business Economics and Finance
Type: Book
ISBN: 978-1-78743-409-7

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Book part
Publication date: 13 August 2007

Todd Fister and Anju Seth

This paper complements previous research on investment in firm-specific human capital by applying real options analysis. Our framework suggests that the parties receive…

Abstract

This paper complements previous research on investment in firm-specific human capital by applying real options analysis. Our framework suggests that the parties receive valuable options to exit the contract when information becomes revealed in the future, but these options may be more valuable for one party than the other. Companies and workers attempt to reduce the value of the options through contractual mechanisms that either shift wealth to the party granting the option or prevent the option from being exercised. In both cases, the mechanisms cause the parties to invest in firm-specific capital, resulting in higher output and higher wages.

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Real Options Theory
Type: Book
ISBN: 978-0-7623-1427-0

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Article
Publication date: 14 September 2015

Michel Ferrary

The purpose of this paper is explore an organizational design that allows firms to invest in transferable strategic human capital. Strategic human capital requires…

Abstract

Purpose

The purpose of this paper is explore an organizational design that allows firms to invest in transferable strategic human capital. Strategic human capital requires considerable investment in training costs, effective compensation, opportunities for professional development and expectancy of long employment relationship within a firm. A firm can undertake investment in strategic knowledge and workers can engage in learning only in these circumstances. However, there are a number of risks that are associated with investment in strategic human capital within a firm. In this paper, the author argues that providing strategic human capital to other firms within alliances could be a strategy for leveraging resource. Strategic knowledge facilitates transactions between firms possessing co-specialized human capital and tangible resources. Organizational design of an alliance based on co-specialization allows to balance costs and returns for the human capital supplier, as well as for beneficiary and workers. Within an alliance, the human capital supplier provides workers to a beneficiary firm and coordinates their activities. Supplier specialized in human capital investment ensures improved performance, productivity and efficiency of workers. Possibility to form a greater pool of labor force and to centralize training allows optimizing cost and sharing risks associated with investment activity among alliance participants. Human resource practices in an alliance system foster long-term employment relationship. Entering an alliance increases number of job positions, professional development opportunities through horizontal mobility, promotion and learning opportunities for workers. Finally, alliances allow leveraging investment in human capital beyond a single organization.

Design/methodology/approach

This paper conceptualizes the use of alliance based on co-specialization as a strategy to optimize investment in strategic human capital resource. It draws upon the resource-based view (Barney, 1991; Wernerfelt, 1995) and transaction cost theory (Coase, 1937; Williamson, 1981) to examine an alliance as a strategy for leveraging the human capital resources for accessing new markets, building reputation and sharing the risks across more than one organization.

Findings

First, the paper reviews the theoretical literature on human capital as a strategic resource (Becker, 1962; Coff, 1997), its sourcing on internal and external labor markets and respective employment systems (Delery and Doty, 1996; Doeringer and Piore, 1971). Second, it focuses on the features of human capital resource (Barney, 1986; Chi, 1994; Doz and Hamel, 1998). Third, it conceptualizes the use of alliances based on co-specialization as organizational structures for investment in human capital across organizations and examines respective employment system and HR practices (Delery and Doty, 1996; Doeringer and Piore, 1971). As result, the author argues that an alliance can be an alternative mean to optimize returns on investment in human capital with strategic transferable knowledge. By consequence, the author describes an alliance employment system and illustrates the arguments with a case of human capital trading in a co-specialization alliance under a long-term management contract in the luxury hotel industry.

Originality/value

This paper discusses collaborative ventures as a sourcing strategy of the human capital. An alliance strategy is relevant for sourcing the strategic human capital resources. Human capital resource can be accessed by firms through transfer of skills and organizational routines within collaborative agreements, such as alliances based on co-specialization. In this case, alliance is an organizational architecture between organizations that improves the efficiency and productivity, reduces marginal cost on training due to larger scale of operations and reduces risk by splitting investment in human capital and by offering more career and development opportunities for strategic knowledge workers.

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Journal of Knowledge Management, vol. 19 no. 5
Type: Research Article
ISSN: 1367-3270

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Article
Publication date: 15 May 2009

Jinghua Zhang, Fangwei Wu, Deyuan Zhang and Yongmin Wang

The purpose of this paper, starting from a theoretical framework, is to analyze the spillover effects of human capital brought by labor mobility and their influence on the…

Abstract

Purpose

The purpose of this paper, starting from a theoretical framework, is to analyze the spillover effects of human capital brought by labor mobility and their influence on the public education investment.

Design/methodology/approach

Based on the endogenous growth theory, the paper establishes a regional human capital spillover model to examine the spillover effects of human capital coming along with the regional labor mobility and the changes of public education investment decision brought by the spillover effects in China.

Findings

It has been found that the regional mobility of labor has made the developed areas gain the spillover benefits of human capital investment from the underdeveloped areas with their superiority of social and economic environment and restrained the incentives for public education investment in the underdeveloped areas, thus the different areas walk on a different growth path, with the expansion of the difference in the economic and education investment growth.

Originality/value

This paper analyzes the possible influences from the spillover of human capital on the economic growth and educational investment and finds a high possibility for the underdeveloped areas to get into a “low development trap” of education investment. The key to solving the problem is to internalize the externalities by the active public policy, in order to realize equal education, rational investment and balanced development.

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China Agricultural Economic Review, vol. 1 no. 3
Type: Research Article
ISSN: 1756-137X

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Article
Publication date: 6 September 2011

Yitao Jiang, Xiaojun Shi, Shunming Zhang and Jingjing Ji

The purpose of this paper is to shed light on the effect of high‐level human capital investment, using tertiary education as the proxy, on the urban‐rural income gap in China.

Abstract

Purpose

The purpose of this paper is to shed light on the effect of high‐level human capital investment, using tertiary education as the proxy, on the urban‐rural income gap in China.

Design/methodology/approach

Using a panel dataset covering 28 provinces of China over the period from 1988 to 2007, this paper employs Hansen's method and two‐step GMM‐SYS estimator to estimate the threshold regression model and the dynamic fixed‐effect panel model, respectively.

Findings

The urban‐rural income gap is found to be related to high‐level human capital investment in an inverted U‐shaped pattern with respect to economic development level. The estimated threshold turning point is around 20,000 RMB GDP per capita. This estimate is sufficiently robust to model specifications and variants of the dependent variable.

Social implications

The authors forecast that high‐level human capital investment could play a role in bridging the urban‐rural income gap at the national level by 2014, when China's GDP per capita assumes an annual growth rate of 7.5 percent.

Originality/value

This, it is believed, is the first research to find an inverted U‐shaped pattern for high‐level human capital investment and urban‐rural income gap nexus in China.

Details

China Agricultural Economic Review, vol. 3 no. 3
Type: Research Article
ISSN: 1756-137X

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Book part
Publication date: 19 September 2014

Eirik Sjåholm Knudsen and Lasse B. Lien

The relevance of finance for strategy is probably never greater than during a recession. We argue that the strategy literature has been virtually silent on the issue of…

Abstract

The relevance of finance for strategy is probably never greater than during a recession. We argue that the strategy literature has been virtually silent on the issue of recessions, and that this constitutes a regrettable sin of omission. Recessions are also periods when the commonly held view of financial markets in the strategy literature – efficient, and therefore strategically irrelevant – is particularly misplaced. A key route to rectify this omission is to focus on how recessions affect investment behavior, and thereby firms’ stocks of assets and capabilities which ultimately will affect competitive outcomes. In the present chapter, we aim to contribute by analyzing how two key aspects of recessions, demand reductions and reductions in credit availability, affect three different types of investments: physical capital, R&D and innovation, and human- and organizational capital. We synthesize and conceptualize insights from finance- and macroeconomics about how recessions affect different types of investments and find that recessions not only affect the level of investment, but also the composition of investments. Some of these effects are quite counterintuitive. For example, investments in R&D are both more and less sensitive to credit constraints than physical capital is, depending on available internal finance. Investments in human capital grow as demand falls, and both R&D and human capital investments show important nonlinearities with respect to changes in demand.

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Finance and Strategy
Type: Book
ISBN: 978-1-78350-493-0

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Article
Publication date: 20 May 2021

Wenchen Guo and Mengxin Chen

This paper aims to clarify the factors that affect the formation of organizational human capital competitive advantage (OHCCA) and construct its structural dimensions.

Abstract

Purpose

This paper aims to clarify the factors that affect the formation of organizational human capital competitive advantage (OHCCA) and construct its structural dimensions.

Design/methodology/approach

This research method adopted grounded theory using 20 interviews of managers from 10 companies. Relevant literature was reviewed to conduct open coding, Axial coding and selective coding to ensure OHCCA concept and dimensions.

Findings

Studies have shown that OHCCA formation of results from investment and collaboration of three levels: organization, teams and departments and employees. OHCCA formation is composed of three dimensions of organizational human capital investment: planning, practice and stock.

Research limitations/implications

This research enriches the organizational human capital and competitive advantage theories.

Practical implications

The practical significance is to provide theoretical and practical guidance for organizations in creating OHCCAs.

Originality/value

This research is the first to propose and define the OHCCA concept and construct a three-dimensional structure model. Furthermore, this research has revealed the leading factors that affect OHCCA's formation process.

Details

Journal of Intellectual Capital, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1469-1930

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Article
Publication date: 7 September 2010

Naveed Iqbal Chaudhry and Muhammad Azam Roomi

The purpose of this paper is to examine empirically the impact of human capital development in organizations. It is based on some conceptual aspects of human resource…

Abstract

Purpose

The purpose of this paper is to examine empirically the impact of human capital development in organizations. It is based on some conceptual aspects of human resource accounting and considers how investments in the development of human capital can be measured in order to investigate the financial returns for organizations.

Design/methodology/approach

The study is exploratory in nature as this is the first of its kind in the Pakistani manufacturing sector. The technique of convenience sampling was used to collect the data due to time and resource limitations. The sample comprises of 30 leading companies in the Pakistani textile sector. A self‐administered postal questionnaire was designed for the research survey. The results focus on the benefits derived by using the capital investment appraisal techniques of human resource accounting including: return on investment, benefit to cost ratio, weighted average cost of capital, and bottom line evaluations.

Findings

The results provide evidence of an association between investment in the development of human capital and the benefits, which organizations can reap from such investments. It further finds that the organizations investing in training and development programs provide high employee productivity that ultimately contributes towards high‐organizational performance.

Research limitations/implications

Owing to the research design, the results may exhibit a lack of generalizability to other sectors. As the results cannot be applied to other organizations, further research can be done by using the same techniques.

Originality/value

This paper is a groundbreaking work in Pakistan and thereby an addition to the existing global literature on human resource accounting. This research provides new directions for the literature in this area, by encouraging a debate about the importance of investing in the development of human capital.

Details

Journal of Human Resource Costing & Accounting, vol. 14 no. 3
Type: Research Article
ISSN: 1401-338X

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Article
Publication date: 1 March 2006

Susan Cantrell, James M. Benton, Terry Laudal and Robert J. Thomas

Over the past three years Accenture developed and applied a new measurement tool that assesses the maturity of an organization's human capital development processes

Abstract

Purpose

Over the past three years Accenture developed and applied a new measurement tool that assesses the maturity of an organization's human capital development processes, benchmarks the processes' performance against other organizations, and determines the relationship of each process to bottom line business results. It is designed to help executives make significantly more informed choices about their investments in human capital. This article aims to look at this tool.

Design/methodology/approach

The tool, known as the human capital development framework, now has been tested in more than 60 organizations. This case describes how one organization used it to help turn around a struggling division.

Findings

Results of the initial implementations of the framework suggest that financial performance improves as a company improves its scoring in those critical human capital processes with strong relationships to financial success. As an organization moves from one benchmarking quartile to the next in these processes within the framework scoring, its capital efficiency – or the ratio of total annual sales to the capital invested in the operations of the business by shareholders and creditors – improves from 10 to 15 percent.

Practical implications

The framework outlined in this article provides a tool that enables company leaders to make clear‐eyed assessments of the payoff from human capital investments. It helps organizations diagnose their strengths and weaknesses in key human capital practices, to set investment priorities and track performance, and to establish an empirical link between human capital investments, business practices, and overall business performance.

Originality/value

Those organizations in the study with more mature human capital processes have better financial performance than those organizations with less mature processes. Specifically, those organizations that focus on processes devoted to three key areas – creating a people strategy aligned with the business strategy, providing supportive work environments, and developing employees by giving them ample opportunities to learn and grow – achieve far greater economic success than those that do not.

Details

Strategy & Leadership, vol. 34 no. 2
Type: Research Article
ISSN: 1087-8572

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Article
Publication date: 1 April 2003

Georgios I. Zekos

Aim of the present monograph is the economic analysis of the role of MNEs regarding globalisation and digital economy and in parallel there is a reference and examination…

Abstract

Aim of the present monograph is the economic analysis of the role of MNEs regarding globalisation and digital economy and in parallel there is a reference and examination of some legal aspects concerning MNEs, cyberspace and e‐commerce as the means of expression of the digital economy. The whole effort of the author is focused on the examination of various aspects of MNEs and their impact upon globalisation and vice versa and how and if we are moving towards a global digital economy.

Details

Managerial Law, vol. 45 no. 1/2
Type: Research Article
ISSN: 0309-0558

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