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Book part
Publication date: 12 November 2018

Malcolm Tight

The theory of human capital has arguably been the most influential theory impacting upon higher education policy (and educational policy in general) worldwide over the…

Abstract

The theory of human capital has arguably been the most influential theory impacting upon higher education policy (and educational policy in general) worldwide over the last half century or more. In more recent years it has been supplemented by social capital theory. This chapter reports on a systematic review of publications that have applied these theories in the context of higher education research, examining the origins and meanings of the theories, their application and practice, and the issues and critiques that have been raised. It concludes that while both theories have underlying faults, most notably perhaps in their treatment of human beings and their relationships as resources, they remain essential to higher education and higher education research in maintaining the interest of policy-makers and funders.

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Article
Publication date: 15 November 2010

Philip Law

Macau is a major gambling city in Asia, with many tourists and customers visiting its casinos every day. These visitors include not only recreational and pathological…

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Abstract

Purpose

Macau is a major gambling city in Asia, with many tourists and customers visiting its casinos every day. These visitors include not only recreational and pathological gamblers, but also professional people such as accountants. Although, past studies have been carried out on the gambling behavior of various individuals, no research has examined the actual gambling outcome of accountants. The rationale for this research is that accountants may be more confident in their ability to predict or calculate gambling outcomes than other individuals because of their numerical competency. This paper aims to address these issues.

Design/methodology/approach

This study is ought to be the first to use data on professional accountants to examine the actual gambling outcomes for accountants against the background of human capital theory. The data are taken from an on‐site survey of 203 professional accounting professionals visiting a casino in Macau.

Findings

The results of the logistic regressions indicate that the variables of “age” and “previous win” have no significant influence on the actual gaming outcome for accountants, but that certified public accountants (CPA) status, self‐confidence, temper, and luck may positively affect the outcome. Further, female accounting professionals are less likely to win than male accounting professionals. The results support the validity of human capital theory, which asserts that the market compensates the cost of education. Although table games are based on casino mathematics, probability, and luck, it is interesting to note that human capital theory also applies in the gaming industries.

Originality/value

The results extend the theoretical development of human capital theory and broaden its application from business sectors to the gaming industry. Further research is recommended to validate the findings.

Details

Management Research Review, vol. 33 no. 12
Type: Research Article
ISSN: 2040-8269

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Article
Publication date: 1 January 1981

Eric G. Flamholtz and John Lacey

Research in labour economics during the past several years has led to the development of the theory of human capital. This theory deals with a variety of issues concerning…

Abstract

Research in labour economics during the past several years has led to the development of the theory of human capital. This theory deals with a variety of issues concerning the productivity of people as the result of their human capital.

Details

Personnel Review, vol. 10 no. 1
Type: Research Article
ISSN: 0048-3486

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Book part
Publication date: 16 December 2016

Alexandre Rambaud and Jacques Richard

This chapter gives in “Introduction to the Human Capital Issue” a critical analysis of the standard (economic) Human Capital (HC) theory, with the help of some…

Abstract

Purpose

This chapter gives in “Introduction to the Human Capital Issue” a critical analysis of the standard (economic) Human Capital (HC) theory, with the help of some “traditional” (founding) accounting concepts. From this study, to avoid the accounting and social issues highlighted in “Introduction to the Human Capital Issue,” we present, in “The “Triple Depreciation Line” Model and the Human Capital,” the “Triple Depreciation Line” (TDL) accounting model, developed by Rambaud & Richard (2015b), and we apply it to “HC,” but viewed as genuine accounting capital – a matter of concern – that firms have to protect and maintain.

Methodology/approach

From a critical review of literature on HC theory, from the origin of this concept to its connection with sustainable development, this chapter provides a conceptual discussion on this notion and on the differences/common points between capital and assets in accounting and economics. Then, it uses a normative accounting model (TDL), initially introduced to extend, in a consistent way, financial accounting to extra-financial issues.

Findings

This analysis shows at first that the standard (economic) HC theory is based on a (deliberate) confusion between assets and capital, in line with a standard economic perspective on capital. Therefore, this particular viewpoint implies: an accounting issue for reporting HC, because “traditional” accounting capital and assets are clearly isolated concepts; and a societal issue, because this confusion leads to the idea that HC does not mean that human beings are “capital” (i.e., essential), or have to be maintained, even protected, for themselves. It only means that human beings are mere productive means. The application of the TDL model to an accounting redefinition of HC allows a discussion about some key issues involved in the notion of HC, including the difference between the standard and “accounting” narratives on HC. Finally, this chapter presents some important consequences of this accounting model for HC: the disappearance of the concept of wage and the possibility of reporting repeated (or continuous) use of HC directly in the balance sheet.

Research implications

This chapter contributes to the literature on HC and in general on capital and assets, by stressing in particular some confusions and misunderstandings in these concepts. It fosters a cross-disciplinary approach of these issues, through economic, accounting, and sustainability viewpoints. This analysis also participates in the development of the TDL model and the research project associated. It finally proposes another perspective, more sustainable, on HC and HC reporting.

Social implications

The stakes of HC are important in today’s economics, accounting, and sustainable development. The different conceptualizations of HC, and the narratives behind it, may have deep social and corporate implications. In this context, this analysis provides a conceptual, and practicable, framework to develop a more sustainable concept of HC and to enhance working conditions, internal business relations, integrated reporting. As an outcome of these ideas, this chapter also questions the standard corporate governance models.

Originality/value

This chapter gives an original perspective on HC, and in general on the concept of capital, combining an economic and an accounting analysis. It also develops a new way to report HC, using an innovative integrated accounting model, the TDL model.

Details

Finance and Economy for Society: Integrating Sustainability
Type: Book
ISBN: 978-1-78635-509-6

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Article
Publication date: 4 April 2019

Alix Valenti and Stephen V. Horner

Human capital has been traditionally viewed in terms of how an individual’s investment in knowledge, skills and abilities can lead to higher pay or promotions. More…

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Abstract

Purpose

Human capital has been traditionally viewed in terms of how an individual’s investment in knowledge, skills and abilities can lead to higher pay or promotions. More recently, human capital has been regarded as a unit-level resource using the term “human capital resources” to consider the aggregate effects of human capital. The purpose of this paper is to examine the collective human capital present in a firm’s board of directors as a valuable resource leading to superior firm outcomes.

Design/methodology/approach

The study examined the effects on firm innovation of the scientific expertise of corporate directors, average board tenure and the presence of a firm’s founder on the board. Data from a sample of pharmaceutical firms were analyzed with the dependent variable, innovation, measured as patent applications and both individual and unit-level human capital measures of the predictor variables.

Findings

The results show that the presence of a founder-director is positively related to innovation and more pronounced when combined with the board’s scientific expertise. Board tenure shows a relationship to innovation and is more evident in combination with the board’s aggregate level of scientific expertise. The effect of directors’ scientific expertise is also greater when measured at the board level of scientific expertise.

Research limitations/implications

Future studies should examine these relationships within a broader context extending the research to other industries thereby incorporating wider variation in both the antecedents and measures of innovation. In addition, future studies might investigate a likely non-monotonic relationship of board tenure with strategic outcomes, recognizing the non-linear nature of effects of board tenure.

Practical implications

In addition to the theoretical and empirical implications, this research may also inform practicing managers charged with constituting their boards of directors and provide some guidance for the recruitment and retention of board members. The research may also assist top managers and investors in knowing when the presence of a founder on the board is useful and supportive of the firm’s strategic direction.

Originality/value

The study extends scholarly understanding of human capital theory beyond the top management team to boards of directors demonstrating the importance not only of directors’ individual capital but also how it combines with that of other directors. Moreover, it enhances understanding of board characteristics beyond the bounds of demographic characteristics to show that additional qualities affect firm strategy. This research also informs managers, boards and investors how boards might be more effectively constituted to impact firm strategy.

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Article
Publication date: 1 June 2001

Lars Nerdrum and Truls Erikson

In this article, intellectual capital is seen as complementary capacities of competence and commitment. Based on theoretically and empirically robust human capital theory

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Abstract

In this article, intellectual capital is seen as complementary capacities of competence and commitment. Based on theoretically and empirically robust human capital theory, we define intellectual capital as individuals’ complementary capacity to generate added value and thus create wealth. Resources are then perceived to be both tangible and intangible. This view is an extension of human capital theory to include the intangible capacities of people. Implications for future research are discussed.

Details

Journal of Intellectual Capital, vol. 2 no. 2
Type: Research Article
ISSN: 1469-1930

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Book part
Publication date: 20 May 2005

Robert S. Goldfarb and Thomas C. Leonard

Distribution concerns who gets what. But does “who” refer to the personal distribution of income among individuals or the functional distribution of income among suppliers…

Abstract

Distribution concerns who gets what. But does “who” refer to the personal distribution of income among individuals or the functional distribution of income among suppliers of productive factors? For nearly 150 years, Anglophone distribution theory followed the Ricardian emphasis on functional distribution – the income shares of labor, land, and capital. Only beginning in the 1960s, and consolidated by a research outpouring in the early 1970s, does mainstream economics turn to the personal conception of distribution. This essay documents Anglophone (primarily American) economics’ move from functional to personal distribution, and tries to illuminate something of its causes and timing.

Details

A Research Annual
Type: Book
ISBN: 978-1-84950-316-7

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Article
Publication date: 30 September 2014

Stephen K. Nkundabanyanga, Waswa Balunywa, Venancio Tauringana and Joseph M. Ntayi

The purpose of this paper is to draw from multiple theories of upper echelons, stakeholder, agency, resource-based view and stewardship to establish the extent to which…

Abstract

Purpose

The purpose of this paper is to draw from multiple theories of upper echelons, stakeholder, agency, resource-based view and stewardship to establish the extent to which human capital (other than that of the board itself) in service organisations affect board role performance in those service sector firms.

Design/methodology/approach

This study is cross-sectional and correlational. Analyses are conducted using SPSS and Analysis of Moment Structures software on a sample of 128 service firms in Uganda.

Findings

Findings reveal that dimensions of employee safety, entrepreneurial skills, entrepreneurial development, employee welfare and employee relations fit the model of human capital and predict up to 69.1 per cent of the variance in board role performance. The results of this study reveal that board role performance is affected by prior decisions, for example, to invest in corporate social responsibility (CSR) activities, targeting employees that augment firm characteristics like existence of appropriate human capital. Essentially, an improvement in the quality of human capital explains positive variances in board role performance.

Research limitations/implications

Cross-sectional data do not allow for testing of the process aspect of the models; however, they provide evidence that the models can stand empirical tests. Additional research should examine the process aspects of human capital and board role performance.

Practical implications

Most companies in developing nations have relied on normative guidelines in prescribing what boards need to enhance performance, probably explaining why some boards have not been successful in their role performance. This research confirms that appropriate human capital, which can be leveraged through CSR ideals of employee safety, recognition, welfare and training in entrepreneurship, consistent with the stakeholder theory, can facilitate the board in the performance of its roles. In the developing country context, organisations’ boards could use these findings as a guideline, that is, what to focus on in the context of human capital development in organisations because doing so improves their own role performance.

Originality/value

This study is one of the few that partly account for endogeneity in the study of boards, a methodological concern previously cited in literature (Bascle, 2008; Hamilton and Nickerson, 2003). Empirical associations between board role performance and organisational performance would not be useful unless we are able to grasp the causal mechanisms that lie behind those empirical associations (Hambrick, 2007). Thus, this study contributes to literature that tries to account for variances in board role performance and supports a multi-theoretical approach as a relevant framework in the study of human capital and board role performance.

Details

Social Responsibility Journal, vol. 10 no. 4
Type: Research Article
ISSN: 1747-1117

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Article
Publication date: 17 February 2012

Faruk Abdullah

The purpose of this paper is to analyze the human capital theory from an Islamic perspective. It studies the primary sources of Islam to discover its contribution towards…

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Abstract

Purpose

The purpose of this paper is to analyze the human capital theory from an Islamic perspective. It studies the primary sources of Islam to discover its contribution towards human capital development.

Design/methodology/approach

The paper adopts inductive and analytical method to interpret Islamic viewpoints towards human capital development. It studies the classical and modern sources of Islamic law and analyzes scholars' opinions.

Findings

In fact, human capital theory has a different understanding in Islam, due to its different objectives. However, it resembles the conventional theory in the way that it urges the development of human beings in education, skills and abilities. Islamic teachings contribute a lot to foster development among the individuals in every aspect of their lives. The way Islam gives incentive to development is unique; because, with the improvement of education, good skills, work and production, physical health and perfection, it is concerned about the moral and ethical development of employees, which is no doubt having a great effect in the development of the organization. Moreover, Islamic society plays an important role in nurturing enthusiastic and competent individuals.

Originality/value

It is expected that the paper would be of interest to Muslim authorities, as a means to motivate their employees, as well as to share ideas across the academic disciplines.

Details

Humanomics, vol. 28 no. 1
Type: Research Article
ISSN: 0828-8666

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Article
Publication date: 17 December 2018

Hannah Vivian Osei, Ahmed Agyapong and Kwame Owusu Kwateng

Interest has been generated for a while in unpacking the “black box” and providing a contingency approach to understanding the effects of human resource management (HRM…

Abstract

Purpose

Interest has been generated for a while in unpacking the “black box” and providing a contingency approach to understanding the effects of human resource management (HRM) practices. This study aims to investigate the possibility that the relationship between human capital development and task performance is mediated by work self-efficacy and work engagement – and that this mediation depends on the degree of perceived investment in employees’ development.

Design/methodology/approach

Based on a synthesis of theories –systems, social cognitive and social identity theories – a moderated mediation model is tested using data from 220 academic employees and Heads of Departments from multiple Higher Educational Institutions in Ghana. AMOS and Hayes Conditional Process analysis were used to analyze the data.

Findings

The study finds support for a bundle of human capital investments boosting work self-efficacy and motivating work engagement, as well as task performance. Consistent with expectations, the mediation in human capital investments to task performance via work self-efficacy is conditional on the degree of perceived investment in employees’ development.

Originality/value

The study provides the first attempt at studying a conditional process model in human capital development by addressing whether, how and when human capital system functions more or less effectively, and provides knowledge on the “black box” in HRM.

Details

International Journal of Organizational Analysis, vol. 27 no. 3
Type: Research Article
ISSN: 1934-8835

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