Human Capital and Corporate Financial Performance: An Industry Analysis

Human capital was, for several decades, undervalued. This idea was reversed in time, and today, this cognitive stock we speak of is at the center of a company's organization. Finding an economic theory that does not emphasize its importance is almost impossible. This is a valuable explanatory component of economic growth and development because it possesses an intangibility that makes it hard for other entities to duplicate. Therefore, the purpose of this article is to show the importance of this transition of mentalities, analyze the weight of this valuation as a return on a company's financial performance, and as a contribution to future growth, to emphasize why this concept has been achieved increasing magnitude. The study used 600 companies from 12 industries from 2014 to 2019. The intellectual value-added coefficient method (VAIC) is used to measure Intellectual Capital, and the performance is analyzed through profitability and cost-effectiveness. The empirical results show that in most industries, human capital efficiency contributes positively to the company's performance, although some aspects need to be worked on to improve profitability. The implications of these results are reflected in companies' need to pay more attention to human capital and what its increase could bring, developing programs to improve employees’ qualifications, and offering competitive wages and benefits that will encourage their dedication.