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Do Differences Make a Difference? The Impact of Human Capital Diversity, Experience and Compensation on Firm Performance in Engineering Consulting

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  • Keld Laursen
  • Volker Mahnke
  • Per Vejrup-Hansen

Abstract

The paper investigates the relationship between human capital characteristics and firm performance in engineering consulting. Because general experience, firm-specific human capital and diversity carry specific costs and benefits we hypothesize curvilinear (taking inverted U-shapes) relations to firm performance. We find little effect of general experience and firm-specific human capital, but the findings give some support for the curvilinear relation between performance and human capital diversity.

Suggested Citation

  • Keld Laursen & Volker Mahnke & Per Vejrup-Hansen, 2005. "Do Differences Make a Difference? The Impact of Human Capital Diversity, Experience and Compensation on Firm Performance in Engineering Consulting," DRUID Working Papers 05-04, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies.
  • Handle: RePEc:aal:abbswp:05-04
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    References listed on IDEAS

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    1. Ichniowski, Casey & Shaw, Kathryn & Prennushi, Giovanna, 1997. "The Effects of Human Resource Management Practices on Productivity: A Study of Steel Finishing Lines," American Economic Review, American Economic Association, vol. 87(3), pages 291-313, June.
    2. Mahoney, Joseph T., 1995. "The management of resources and the resource of management," Journal of Business Research, Elsevier, vol. 33(2), pages 91-101, June.
    3. Jacobsson, Staffan & Oskarsson, Christer, 1995. "Educational statistics as an indicator of technological activity," Research Policy, Elsevier, vol. 24(1), pages 127-136, January.
    4. Shapiro, Carl & Stiglitz, Joseph E, 1984. "Equilibrium Unemployment as a Worker Discipline Device," American Economic Review, American Economic Association, vol. 74(3), pages 433-444, June.
    5. S.A. Lippman & R.P. Rumelt, 1982. "Uncertain Imitability: An Analysis of Interfirm Differences in Efficiency under Competition," Bell Journal of Economics, The RAND Corporation, vol. 13(2), pages 418-438, Autumn.
    6. Joanne Salop & Steven C. Salop, 1976. "Self-selection and turnover in the labor market," Special Studies Papers 80, Board of Governors of the Federal Reserve System (U.S.).
    7. Joanne Salop & Steven Salop, 1976. "Self-Selection and Turnover in the Labor Market," The Quarterly Journal of Economics, Oxford University Press, vol. 90(4), pages 619-627.
    8. Edward P. Lazear, 1991. "Labor Economics and the Psychology of Organizations," Journal of Economic Perspectives, American Economic Association, vol. 5(2), pages 89-110, Spring.
    9. Milgrom, Paul & Roberts, John, 1995. "Complementarities and fit strategy, structure, and organizational change in manufacturing," Journal of Accounting and Economics, Elsevier, vol. 19(2-3), pages 179-208, April.
    10. Gary S. Becker, 1962. "Investment in Human Capital: A Theoretical Analysis," Journal of Political Economy, University of Chicago Press, vol. 70, pages 1-9.
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    Cited by:

    1. Ƙstergaard, Christian R. & Timmermans, Bram & Kristinsson, Kari, 2011. "Does a different view create something new? The effect of employee diversity on innovation," Research Policy, Elsevier, vol. 40(3), pages 500-509, April.
    2. Giuri, Paola & Ploner, Matteo & Rullani, Francesco & Torrisi, Salvatore, 2010. "Skills, division of labor and performance in collective inventions: Evidence from open source software," International Journal of Industrial Organization, Elsevier, vol. 28(1), pages 54-68, January.

    More about this item

    Keywords

    Educational diversity; human capital; firm performance;

    JEL classification:

    • C31 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions; Social Interaction Models
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • M5 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics

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