IDEAS home Printed from https://ideas.repec.org/a/bla/jbfnac/v53y2026i2p970-997.html

Human and Intellectual Capital Spending Efficiency and Efficacy: Evidence from U.S. Universities

Author

Listed:
  • Christopher S. Armstrong
  • Alan D. Jagolinzer
  • Sarah Kröchert
  • Andrea Pawliczek

Abstract

We analyze the efficiency and efficacy of human and intellectual capital investment to better understand the effects of social investment. Existing literature in the corporate setting lacks analysis on the impact of human and intellectual capital investment, likely due to data scarcity. We use universities as our research setting because they regularly report standardized data, have similarities with for‐profit corporations in terms of size and oversight, and directly support corporate ESG initiatives related to workforce diversity. We find that (1) private donations and government grants increase in human and intellectual capital spending efficiency, (2) graduation rates of underrepresented students are higher at universities with more efficient spending for the lower quantiles of the graduation rate distribution, and (3) post‐graduate income is higher for students from the lower parental income quintiles at universities with higher spending efficiency. Collectively, our evidence suggests that more efficient investment in human and intellectual capital can generate improvements in core ESG outcomes.

Suggested Citation

  • Christopher S. Armstrong & Alan D. Jagolinzer & Sarah Kröchert & Andrea Pawliczek, 2026. "Human and Intellectual Capital Spending Efficiency and Efficacy: Evidence from U.S. Universities," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 53(2), pages 970-997, April.
    • Handle: RePEc:bla:jbfnac:v:53:y:2026:i:2:p:970-997
    DOI: 10.1111/jbfa.70044
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/jbfa.70044
    Download Restriction: no
    File URL: https://libkey.io/10.1111/jbfa.70044?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Dimitris Margaritis & Maria Psillaki, 2007. "Capital Structure and Firm Efficiency," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 34(9‐10), pages 1447-1469, November.
    2. Jung Ho Choi & Joseph Pacelli & Kristina M. Rennekamp & Sorabh Tomar, 2023. "Do Jobseekers Value Diversity Information? Evidence from a Field Experiment and Human Capital Disclosures," Journal of Accounting Research, John Wiley & Sons, Ltd., vol. 61(3), pages 695-735, June.
    3. Johnes, Geraint & Johnes, Jill, 2009. "Higher education institutions' costs and efficiency: Taking the decomposition a further step," Economics of Education Review, Elsevier, vol. 28(1), pages 107-113, February.
    4. Ehrenberg, R. G. & Smith, C. L., 2003. "The sources and uses of annual giving at selective private research universities and liberal arts colleges," Economics of Education Review, Elsevier, vol. 22(3), pages 223-235, June.
    5. A. Payne, 2001. "Measuring the Effect of Federal Research Funding on Private Donations at Research Universities: Is Federal Research Funding More than a Substitute for Private Donations?," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 8(5), pages 731-751, November.
    6. Katrin Hummel & Dominik Jobst, 2024. "An Overview of Corporate Sustainability Reporting Legislation in the European Union," Accounting in Europe, Taylor & Francis Journals, vol. 21(3), pages 320-355, September.
    7. Connie X. Mao & Jamie Weathers, 2019. "Employee treatment and firm innovation," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 46(7-8), pages 977-1002, July.
    8. Sandra E. Black & Kalena E. Cortes & Jane Arnold Lincove, 2015. "Academic Undermatching of High-Achieving Minority Students: Evidence from Race-Neutral and Holistic Admissions Policies," American Economic Review, American Economic Association, vol. 105(5), pages 604-610, May.
    9. Jun Li & Di (Andrew) Wu, 2020. "Do Corporate Social Responsibility Engagements Lead to Real Environmental, Social, and Governance Impact?," Management Science, INFORMS, vol. 66(6), pages 2564-2588, June.
    10. Juan Alcácer & Wilbur Chung & Ashton Hawk & Gonçalo Pacheco-de-Almeida, 2018. "Applying Random Coefficient Models to Strategy Research: Identifying and Exploring Firm Heterogeneous Effects," Strategy Science, INFORMS, vol. 3(3), pages 533-553, September.
    11. Edmans, Alex, 2011. "Does the stock market fully value intangibles? Employee satisfaction and equity prices," Journal of Financial Economics, Elsevier, vol. 101(3), pages 621-640, September.
    12. Wei Chen & Paul Hribar & Sam Melessa, 2023. "Standard Error Biases When Using Generated Regressors in Accounting Research," Journal of Accounting Research, John Wiley & Sons, Ltd., vol. 61(2), pages 531-569, May.
    13. Peter Arcidiacono & Esteban M. Aucejo & V. Joseph Hotz, 2016. "University Differences in the Graduation of Minorities in STEM Fields: Evidence from California," American Economic Review, American Economic Association, vol. 106(3), pages 525-562, March.
    14. Hans B. Christensen & Luzi Hail & Christian Leuz, 2021. "Mandatory CSR and sustainability reporting: economic analysis and literature review," Review of Accounting Studies, Springer, vol. 26(3), pages 1176-1248, September.
    15. Chad Loes & Ernest Pascarella & Paul Umbach, 2012. "Effects of Diversity Experiences on Critical Thinking Skills: Who Benefits?," The Journal of Higher Education, Taylor & Francis Journals, vol. 83(1), pages 1-25, January.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Stefanie Reustlen & Martin Stawinoga, 2024. "Do internationally operating companies act in a socially sustainable manner? An empirical comparison of disclosure regarding employee matters and human rights matters," Sustainability Nexus Forum, Springer, vol. 32(1), pages 1-22, December.
    2. Ylinen, Mika & Ranta, Mikko, 2025. "Predicting corporate innovation using machine learning and social media data," Technovation, Elsevier, vol. 148(C).
    3. Austin Moss & James P. Naughton & Clare Wang, 2024. "The Irrelevance of Environmental, Social, and Governance Disclosure to Retail Investors," Management Science, INFORMS, vol. 70(4), pages 2626-2644, April.
    4. Boungou, Whelsy & Dufau, Bastien, 2025. "Shareholder wealth effects of corporate sustainability reporting regulations," Finance Research Letters, Elsevier, vol. 80(C).
    5. Keusch, Thomas & Timmermans, Oscar, 2026. "Can financial metrics provide incentives for environmental performance improvement?," LSE Research Online Documents on Economics 139003, London School of Economics and Political Science, LSE Library.
    6. Gillian Wyness & Richard Murphy, 2020. "What is the nature and extent of student–university mismatch?," World of Labour, LISER, pages 477-477, June.
    7. Mika Ylinen & Mikko Ranta, 2024. "Employer ratings in social media and firm performance: Evidence from an explainable machine learning approach," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 64(1), pages 247-276, March.
    8. Amin, Md Ruhul & Kim, Incheol & Lee, Suin, 2021. "Local religiosity, workplace safety, and firm value," Journal of Corporate Finance, Elsevier, vol. 70(C).
    9. Dai, Yunhao & Tong, Xinchu & Wang, Li, 2022. "Workplace safety accident, employee treatment, and firm value: Evidence from China," Economic Modelling, Elsevier, vol. 115(C).
    10. Sarker, Md Showaib Rahman & Mazumder, Sharif & Amin, Md Ruhul, 2023. "Oil price uncertainty, workplace misconduct, and cash holding," International Review of Financial Analysis, Elsevier, vol. 89(C).
    11. Choi, Daewoung & Gam, Yong Kyu & Kang, Min Jung & Shin, Hojong, 2025. "The effect of ESG-motivated turnover on firm financial risk," The British Accounting Review, Elsevier, vol. 57(4).
    12. Sandra Chrzan & Christiane Pott, 2024. "The steering effect of the EU taxonomy: Evidence from German institutional and retail investors," Review of Financial Economics, John Wiley & Sons, vol. 42(4), pages 349-375, October.
    13. Kamis, Rais & Pan, Jessica & Seah, Kelvin KC, 2023. "Do college admissions criteria matter? Evidence from discretionary vs. grade-based admission policies," Economics of Education Review, Elsevier, vol. 92(C).
    14. Anahit Mkrtchyan, & Sandvik, Jason & Xu, Da, 2024. "Employee responses to CEO activism," Journal of Accounting and Economics, Elsevier, vol. 78(1).
    15. Vuong Thao Tran & Van Hoang Vu & Anh Le & Dinh Hoang Bach Phan, 2024. "Does it pay to treat employees well?: The case of informal finance," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 51(1-2), pages 473-510, January.
    16. Adeabah, David & Andoh, Charles & Mensah, Lord, 2025. "Examining the impact of employee-friendly practices on performance volatility in African banks: A textual analysis approach," Emerging Markets Review, Elsevier, vol. 65(C).
    17. Rachel M. Hayes & Feng Jiang & Yihui Pan & Huayi Tang, 2025. "Racial Disparities in Financial Complaints and the Role of Corporate Social Attitudes," Journal of Accounting Research, John Wiley & Sons, Ltd., vol. 63(4), pages 1289-1333, September.
    18. Thomas Bourveau & Rachel W. Flam & Anthony Le, 2026. "Behind the Curtain of Workforce Diversity: Evidence from EEO-1 Reports," Management Science, INFORMS, vol. 72(2), pages 1699-1726, February.
    19. Loncan, Tiago, 2025. "Can employee welfare policies insure workers against fluctuations in employment?," Journal of Corporate Finance, Elsevier, vol. 94(C).
    20. Bart Frijns & Alexandre Garel & Shushu Liao, 2025. "Employee demographic diversity and firm performance," Financial Management, Financial Management Association International, vol. 54(2), pages 305-330, June.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:jbfnac:v:53:y:2026:i:2:p:970-997. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://www.blackwellpublishing.com/journal.asp?ref=0306-686X .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.