Investing in human capital: an analysis of the mismatch between theoretical claim and managerial behaviour

The paper investigates whether the managers’ attitude towards theinvestments in human capital (HC) vary in relation to the financial healthinessof firms. The sample includes all the listed European firms belonging to theEuropean Monetary Union, excluding emerging European markets. The datawas gathered for a seven-year period (2005–2011) and was processed using thefixed-effects panel method. The findings confirm the hypothesised associationbetween investments in HC and the financial healthiness of the firms. The mainlimitation is that the key variable of the research, the training costs, are notrecorded by all companies, and this severely reduced the number of processedobservations. The novelty of the research lies in investigating the associationbetween the investments in HC and the financial healthiness, as the majority ofresearches on HC investigate their association with the firm’s profitability.