Assessing the effects of human capital composition, innovation portfolio and size on manufacturing firm performance

Abstract

Purpose This paper aims to focus on the effects of human capital composition, innovation portfolio and size on manufacturing firms’ performance. Moreover, it seeks to empirically identify the levels of education that are significant in labour productivity. Design/methodology/approach The resource-based view (RBV) theory is applied using data gathered from the National Innovation Survey in the Manufacturing Industries of Peru. Using the ordinary least squares method on a sample of 584 Peruvian manufacturing firms, the effects on firm performance of two subsamples according to innovation portfolio and firm size are determined. Findings The direct effects of human capital composition on productivity show that the higher the workers’ educational level, the higher the productivity. However, if this relationship is analysed in terms of the innovation portfolio, the authors find that labour productivity in companies with product–service innovation is greater (i.e. more significant) than in traditional manufacturing firms with only product innovations. Similarly, if this relationship is compared in terms of company, the authors find that large companies are more significant than small and medium-sized enterprises. Practical implications The study furthers the understanding of how the relationship between human capital composition, innovation portfolio and size of manufacturing firms positively affects labour productivity. Hence, it can help managers to craft their innovation portfolio according to the educational level of their human capital. This could require that not only human resource management innovates, but also that strategic partnerships be developed with educational establishments to boost training towards product–service innovation. Originality/value This study’s results provide confirmation that the configuration of human resources, innovation portfolio and size plays a significant role on manufacturing firms’ performance, particularly in the context of developing countries.

Exploring the Effects of Innovation Strategies and Size on Manufacturing Firms’ Productivity and Environmental Impact

“…Therefore, it can be stated that these results support the hypotheses (H4a). In particular, we can affirm that product-service innovation has a positive effect on the productivity of large manufacturing companies, as found in previous studies [76,91].…”

“…Thus, the firms with less than 50 employees focus their efforts on increasing productivity while companies with more than 50 employees divide their efforts between productivity and environmental impact. Possibly the "productive muscle" of large companies also makes it possible to focus efforts on caring for the environment, as has been mentioned by previous studies [76,91]. In any case, our empirical evidence shows us that even though very few companies carry out product-service innovation, they obtain greater positive effects on productivity and the environment, especially in large companies.…”

“…In this way, the variable can present the value 0 if the company did not launch any product or service, 1 if the company launched one product or service and 2 if the company innovated one product and service together. This form to measure the servitization was made in previous studies [91]. We do not consider the level of maturity or complexity of the service because that information is not collected in the survey.…”

Effect of Fiscal Policy on Human Capital in Thailand

“…That is, domestic educational system and shape increases with the level of human capital in effectively educated countries. Seclen-Luna et al (2020) explored the effects of human capital composition on manufacturing firm performance. The results found that there is a positive relationship between human capital composition, workers' education level, and labor productivity in manufacturing firms.…”

The Relationships between Orientation, Collaboration and Performance for Supply Chain Management of Korean FDI Firms for Sustainable Growth

“…The reason is that firms can understand customers' long-term needs, expectation and preference [23]. The collaboration is similar to product-service innovation in an innovation portfolio [24]. Therefore, firms that want to achieve customer needs through the collaboration need to focus on internal collaboration, attain customer needs through collaboration with suppliers, and respond to customer expectation very well [25].…”