The impact of an innovative human resource function on firm performance: the moderating role of financing strategy

Knight-Turvey, Neal, Neal, Andrew, West, Michael A. and Dawson, Jeremy (2004) The impact of an innovative human resource function on firm performance: the moderating role of financing strategy. CEPDP (630). London School of Economics and Political Science. Centre for Economic Performance, London, UK. ISBN 0753017563

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Abstract

The current study examined the impact of the human resource function and financing strategy on the financial performance of 104 UK manufacturing firms. Hypotheses are drawn from a resource-based perspective on human resource management and a financial theory perspective on capital structure. Results show that an innovative HR function is significantly related to economic performance. However, the relationship between an innovative HR function and economic performance was moderated by the firm¿s financing strategy. Firms obtained higher returns from an innovative HR function when pursuing a low leveraging (debt) financing strategy, a finding consistent with modern finance theory notions that firmspecific strategic assets provide greatest value when financed primarily through equity as opposed to debt.

Item Type:	Monograph (Discussion Paper)
Official URL:	http://cep.lse.ac.uk
Additional Information:	© 2004 the authors
Divisions:	Centre for Economic Performance
Subjects:	H Social Sciences > HD Industries. Land use. Labor
JEL classification:	J - Labor and Demographic Economics > J5 - Labor-Management Relations, Trade Unions, and Collective Bargaining > J51 - Trade Unions: Objectives, Structure, and Effects M - Business Administration and Business Economics; Marketing; Accounting > M1 - Business Administration > M12 - Personnel Management J - Labor and Demographic Economics > J2 - Time Allocation, Work Behavior, and Employment Determination and Creation; Human Capital; Retirement > J24 - Human Capital; Skills; Occupational Choice; Labor Productivity M - Business Administration and Business Economics; Marketing; Accounting > M1 - Business Administration > M11 - Production Management J - Labor and Demographic Economics > J5 - Labor-Management Relations, Trade Unions, and Collective Bargaining
Date Deposited:	25 Jul 2008 11:18
Last Modified:	13 Sep 2024 19:52
URI:	http://eprints.lse.ac.uk/id/eprint/19962

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