Value Creating or Value Capturing? An Examination of Human Capital Usage Flexibility
Strategic human capital research has focused on the rent generating potential of human capital firm specificity and human resource management research has also examined various human resource flexibilities, but the examination of the interaction effect between human capital specificity and flexibility is still an understudied area. The current study focuses on the effect of human capital usage flexibility on a firm’s ability to create and capture value from human capital. Contingencies that moderate the strength of the main relationship, such as levels of human capital firm specificity, HR strategy fit, and research and development intensity have also been examined in the study. Evidence from a merged dataset that combines Human Resource Competency Survey items and the COMPUSTAT firm-level annual financial variables indicates a strong positive impact of perceived human capital usage flexibility on both perceived value capturing and value creation from human capital. The multilevel mixed effect models suggest that human capital firm specificity is a value capturing mechanism and is not directly associated with perceived value creation from human capital. Human capital usage flexibility and firm specificity reinforce each other in the value capturing process, but are substitutes for each other in the value creation process. The current study also suggests that human capital usage flexibility’s value creating potential will be stronger for firms who are competing based on more intensive technological advancement.
Management, human capital, strategic factor market, usage flexibility, value capture, value creation
Networked Digital Library of Theses and Dissertations