TY - JOUR
T1 - The Influence of Capital Structure on Strategic Human Capital
T2 - Evidence From U.S. and Canadian Firms
AU - Liu, Xiangmin
AU - van Jaarsveld, Danielle D.
AU - Batt, Rosemary
AU - Frost, Ann C.
N1 - Funding Information:
Funding for this project came from the Russell Sage Foundation, the Alfred P. Sloan Foundation, and the Social Sciences and Humanities Research Council of Canada. We are grateful to Russell Coff and two anonymous reviewers for their constructive and insightful comments. We would also like to acknowledge valuable feedback from seminar participants at Cornell University, Pennsylvania State University, University of Toronto, and the Industry Studies Association 2012 annual meeting.
PY - 2014/2
Y1 - 2014/2
N2 - Strategic human capital research has emphasized the importance of human capital as a resource for sustained competitive advantage, but firm investments in this intangible asset vary considerably. This article examines whether and how external pressures on firms from capital markets influence their human capital strategy. These pressures have increased over the past three decades due to banking deregulation, technological innovation, and the rise of institutional investors and new financial intermediaries. Against this backdrop, this study examines whether a firm's capital structure as measured by share turnover, shareholder concentration, and financial leverage is associated with firm investment in strategic human capital. Based on survey and objective financial data from 221 establishments in the United States and Canada, our analysis indicates that firms with greater share turnover, higher shareholder concentration, and higher levels of financial leverage are less likely to invest in human resource systems that create strategic human capital. Differences in national financial systems also lead to differential effects for U.S. and Canadian firms.
AB - Strategic human capital research has emphasized the importance of human capital as a resource for sustained competitive advantage, but firm investments in this intangible asset vary considerably. This article examines whether and how external pressures on firms from capital markets influence their human capital strategy. These pressures have increased over the past three decades due to banking deregulation, technological innovation, and the rise of institutional investors and new financial intermediaries. Against this backdrop, this study examines whether a firm's capital structure as measured by share turnover, shareholder concentration, and financial leverage is associated with firm investment in strategic human capital. Based on survey and objective financial data from 221 establishments in the United States and Canada, our analysis indicates that firms with greater share turnover, higher shareholder concentration, and higher levels of financial leverage are less likely to invest in human resource systems that create strategic human capital. Differences in national financial systems also lead to differential effects for U.S. and Canadian firms.
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U2 - 10.1177/0149206313508982
DO - 10.1177/0149206313508982
M3 - Article
AN - SCOPUS:84893473062
SN - 0149-2063
VL - 40
SP - 422
EP - 448
JO - Journal of Management
JF - Journal of Management
IS - 2
ER -