Title: Investing in human capital: an analysis of the mismatch between theoretical claim and managerial behaviour

Authors: Stefania Veltri; Antonella Silvestri

Addresses: Department of Business Administration and Law, University of Calabria, 87036 Arcavacata di Rende, Italy ' Department of Business Administration and Law, University of Calabria, 87036 Arcavacata di Rende, Italy

Abstract: The paper investigates whether the managers' attitude towards the investments in human capital (HC) vary in relation to the financial healthiness of firms. The sample includes all the listed European firms belonging to the European Monetary Union, excluding emerging European markets. The data was gathered for a seven-year period (2005-2011) and was processed using the fixed-effects panel method. The findings confirm the hypothesised association between investments in HC and the financial healthiness of the firms. The main limitation is that the key variable of the research, the training costs, are not recorded by all companies, and this severely reduced the number of processed observations. The novelty of the research lies in investigating the association between the investments in HC and the financial healthiness, as the majority of researches on HC investigate their association with the firm's profitability.

Keywords: human capital investment; human resources investment; training costs; financial distress; multiplicative interacted model; troubled firms; theoretical claims; managerial behaviour; manager attitudes; Europe; financial health; profitability.

DOI: 10.1504/IJKBD.2017.082432

International Journal of Knowledge-Based Development, 2017 Vol.8 No.1, pp.5 - 23

Received: 13 Oct 2016
Accepted: 14 Oct 2016
Published online: 24 Feb 2017 *

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