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Distortion between Economic and Financial Performance. Does the Human Capital Matter?

Author

Listed:
  • Loredana CULTRERA

    (University of Mons - Warocqué School of Business and Economics, Belgium)

  • Guillaume VERMEYLEN

    (University of Mons - Warocqué School of Business and Economics, Belgium)

Abstract

This paper focuses on and compares two specific definitions of performance: economic and financial, with the aim to provide evidence that supports the distinctions between both definitions. Relying on a Belgian sample consisting of 14,135 firms, our results show that one specific variable deserves to be questioned: the worker’s level of education. On one hand, it seems that the workers’ level of education has a positive impact on economic performance; namely, the more the firms hire highly educated workers, the more productive it is. On the other hand, it seems that the effect is entirely the opposite when the financial performance is taken into account. In this case, the more the firms rely on highly educated workers, the less it is performing in a competitive manner.

Suggested Citation

  • Loredana CULTRERA & Guillaume VERMEYLEN, 2017. "Distortion between Economic and Financial Performance. Does the Human Capital Matter?," Expert Journal of Economics, Sprint Investify, vol. 5(2), pages 53-61.
    • Handle: RePEc:exp:econcs:v:5:y:2017:i:2:p:53-61
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    More about this item

    Keywords

    Firm Performance; Panel data; Economic Performance; Financial Performance;
    All these keywords.

    JEL classification:

    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)
    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity

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