Does human capital investment affect company’s profitability and attributes? Evidence from eu countries
Human capital as a set of knowledge, skills and abilities that one possesses, as well as the value it creates for a company, has become subject of wider interests of scientists and researchers from the middle of 20th century. The main aim of this paper is to explore the impact of human capital investments on company’s profitability. Assumption is that companies which invest in human capital will obtain better financial results than companies with insufficient investments. This specially refers to companies in human capital intensive industry, where employees’ knowledge represents the most valuable asset. Thus, it is assumed that those companies have great proportion of intellectual capital that is capitalized through trademarks. Also it is tested whether level of human capital investments significantly differ with regard to company size and listing status. Verification of empirical evidence is provided through the sample of 12,200 European Union companies within information technology industry, as a case of human capital intensive industry.
Index Terms- companies’ attributes, European Union, human capital investments, intellectual property, profitability.