Dimensions of human capital and firm performance: Micro-firm context

Abstract

The objective of the paper is twofold: first, to examine the dimensions of human capital with respect to a measurement model; second, to test the direct and mediating relationships between human capital dimensions and firm performance. A mixed method research design was used. Results suggest a formative construct of demographic and psychographic factors. We found a positive effect of demographic and psychographic factors on firm performance, as also a positive effect of demographic factor on psychographic factor. Further, results indicate the mediation effect of psychographic factor on firm performance. Finally, this study discusses several theoretical and practical implications of the findings. Keywords: Micro-firm, Human capital, Demographic, Psychographic, Content analysis, Partial least square approach