Do investments in human and physical capital respond differently to financing constraints?

Abstract

Using a representative sample of European firms, we study whether financing constraints affect employers’ investments in employee training and physical capital differently. We measure financing constraints with an index that combines survey and balance sheet data. We instrument this index with the non-performing loans ratio of the bank that provided the last loan to the firms or with the average ratio of banks in the local area. We find that financing constraints have no effect on investment in training, but substantially reduce investment in physical capital.

Evolución al valor del capital humano en América Latina y el caribe - ALC: una revisión sistemática.

“…Como determinan Brunello et al (2022), ellos dicen que han demostrado que la capacitación y el capital físico por empleado contribuyen positivamente a la productividad de la empresa. Nuestros resultados empíricos muestran que las restricciones financieras afectan la productividad, no porque alteren el capital humano de los empleados, sino porque alteran la acumulación de capital físico.…”