Human Capital Perspective An empirical analysis of corporate performance

[Abstract] Based on the people of the capital structure theory, from the perspective of human capital, human capital structure of enterprises were divided, and 32 data of listed companies as samples to human capital on the impact performance of listed companies an empirical analysis. empirical analysis found that people in this capital structure could explain the company's performance.

[Keywords:] capital structure; human capital; human capital; company performance

Long in the commodity economy, the early stages of development, commodity producers operate their own workshops, in this period, the "enterprise" that is, the operators of "enterprise" of the owners, they are purely for their own benefit plans. But this not only the production and operation of the main species of short life cycle, and technological innovation ability, production capacity is low. With the development of productive forces, the modern sense of the business there, and the increasing scale, there has been principal - agent phenomenon, corporate ownership and separation of management rights. As business owners and managers of information is asymmetric, so have the business constraints, supervision and motivation problems. With the expansion of business scale and control of resources, increased capital markets in the developed under , the enterprise can not help increasing the number of shareholders, the ownership of the enterprise is inevitably dispersed, small shareholders have neither a single power, can not bear the huge cost to supervise and motivate business operators, so separated from each other shareholders in the generated The so-called "free rider" phenomenon, corporate governance structure has become increasingly inclined to managers, there was Pele and Means (Berle and Means, 1932) calls "Managerial Revolution", the company's treatment center by the shareholders transferred to the managers. In order to check the imbalance of rights managers, but also produced a so-called "capital-awareness." corporate governance structure between the owners and operators continue to find the balance point. In this process, various factors the impact on the performance of the company to become one of the main areas of academic Research.


I. Review of Related Research

The traditional theory of the firm view that capital employs labor, business owners around the capital to build up a collection of resources and contracts, the value of the company, naturally, are mostly from the perspective of capital structure for the. Capital Structure on Company Value experienced a net gain of roughly theory, theory of net operating income, the traditional theory, MM theory, balance theory, the principal - agent theory, the signal reveals the theory, the pecking order theory, control theory and industrial organization theory of these stages. Masulis and Ronald W other Research found that companies with debt-equity ratio of ordinary shares in a positive correlation between expected income, more foreign scholars to study the structure of corporate governance impact on corporate performance. Lapozta (1999) and Thomsen Pedersen (2000) to study the ownership concentration on company performance; domestic Chen Xiaoyue and Yang Chen (1995) found that the Shanghai Stock Exchange listed company with the debt to equity ratio of income was a negative correlation. Other relevant Research findings vary, both found in the company rates with financial leverage is related to company performance, but also found a negative correlation or not they are related. With the Economic development of information technology, human capital factors have a high attention to the Nobel laureate in Economics in 1979, Theodore · W · Schulz said: "Human is the decisive factor in social progress. Human (including the person's knowledge and skills) only through investment in a certain way, to master the knowledge and skills of all productive resources, human resources are the most important of resources. "So, how to motivate business operators the potential of knowledge and skills, give full play to the role of human capital as the new direction. American scholars Jensen and Meckling (1976) that managers hold fewer shares can not be the biggest of shareholder wealth, because they have an incentive to pursue the benefits of service consumption, but plans to motivate managers to implement the stock selection and implementation of actions to increase shareholder wealth and investment opportunities. Mehran (1995) a random sample of 153 companies empirical Research data found that, CEO and firm performance is positively correlated; Morck, Shleiferh and Vishny (1988), McConnell and Servaes (1990), Hermalin and Weisbach (1991), Griffith (1999) found that, CEO of associated with the performance of the company ownership percentage, but not monotonic linear relationship; Himmelberg, Hubbard and Palia (1999), Palia (2002) found through empirical research, management ownership and corporate performance is not relevant or weak correlation. Managerial Ownership and Corporate Performance on the relationship between the empirical study of domestic scholars have also been two diametrically opposite conclusion: Yuan Guoliang, Wang Huaifang and Liu (1999), Wei Gang (2000) found that managerial ownership and corporate performance no significant relationship or not related; Positive Examination and Wang Jia-sheng (2000), Shi Jianxun (2003) and Ge Wen Lei, Jing Hongwei (2008) find that management equity incentive levels and performance of the company's positive relationship is statistically significant. In 2001, the China Securities Regulatory Commission issued guidance that requires an additional independent directors of listed companies, the independent director system is on corporate governance and performance has played a positive role in academic research has been a problem. Xiongjun Shun and Xu Min (2008 ) a random sample of 390 listed companies in Shanghai Stock Exchange data, the study found the same independent director system between the rate of net capital gains and no significant correlation; Gao Jun (2006) to select the Shanghai Stock Exchange listed company in the manufacturing sector as the research samples and found that independent directors can promote the performance of the company; Zhuzhi Long and Wang Li (2004) and Lvzhao You (2004) also obtained similar conclusions.

For new trends in world Economic development, the traditional capital of wage labor to some extent shaken, the management equity incentives, technology investment, professional and technical personnel into the dry stock, venture capital and other value-oriented full description: For the information technology economy heterogeneous nature of the scarcity of human capital, have shown a trend of human capital and employment. China scholars Shengming Quan, Ni country love, Ding Sheng Hong and optimal capital structure exists in the argument at the same time, revealing the structure of the human capital idea that the business the human capacity of optimal capital structure of the optimal conditions, the core concept of human capital structure. This paper attempts to view human capital, human capital structure to explore the performance of the company.


Second, the research theories and assumptions

From the perspective of human capital elements of the division of corporate governance, creating one of the capital structure. Human capital employment, attracting physical capital, physical capital, human capital formation around the corporate entities, resource allocation of rights, the right to act on the resource. All Heterogeneity of human capital resource allocation decisions, and resource allocation of rights allocation. business managers with business management expertise, independent directors with professional expertise in the area, the investor has a capital investment-oriented capabilities, core technical personnel with special knowledge and skills, ability to work with ordinary people, these human capital combined with each other, deciding the right distribution. In this paper, the assumptions are:
Assumption 1. The management of capital, owners of capital, the capital of independent directors and creditors of capital and company performance relationship.

Assumption 2. The right to allocate capital allocation decisions, thereby further affecting the performance of the company.

Hypothesis 3. Human capital can be measured by relevant indicators and effective.

Hypothesis 4. Human Capital Human capital structure decisions, capital structure and the reaction of people in human capital owners to play on the human capital potential.


Third, empirical analysis

(A) of the variable is set (see Table 1)
1. Be interpreted variables: performance of the company
Corporate performance assessment indicators are profitability and company value accounting indicators, and the company can use the total assets of the accounting profit margin, net margin and EBIT margin of assets, etc.; index value of the company and its market value can be reset by value ratio (Tobin's Q), the stock market and so on. I selected margin of net assets as indicators of company performance evaluation, mainly because of the particularity of the stock market caused a lot of reference of the firm's market value may be small, while the net asset accounting profit margin compared to other indicators to better reflect the company's equity capital efficiency units.

2. Explanatory variables: human capital (management of capital, owners of capital, the capital of independent directors and creditors capital)
From the perspective of human capital management, the company's optimal capital structure is the optimal structure of human capital, this governance structure from the human point of view of the capital, the capital of the company were divided into the management of capital, owners of capital, independent directors capital and capital creditors, while the core technical staff who considered the capital into the management of capital, due to the current provided the enterprise is mainly ordinary workers labor homogeneity, and its human capital has not been included among the corporate governance, this article you do not have to be credited into the company of people of the capital. Meanwhile this paper, the management equity incentive index to measure the degree to be effective management of capital; attended the meeting with the attendance of the independent directors of independent directors to measure the degree of capital to be effective; by average asset-liability ratio to measure the capital of creditors; for small shareholders ubiquitous "free rider" phenomenon, the human capital of minority shareholders has not been well excavated and play, can not be included in human capital, so the rate of use of the top five shareholders of all measured by capital.

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According to the theoretical assumptions and variable settings, set the following regression model:
ln (Y) = @ + β1ln (X1) + β2ln (X2) + β3ln (X3) + β4ln (X4) + ε
Where, Y for the performance of the company, the net return on equity (ROE) to measure; X1 for the management of capital to the management equity incentive index (GC) to measure; X2 is the capital of independent directors to attend meetings of independent directors attendance ( DC) to measure; X3 creditors capital to average asset-liability ratio (ZC) to measure; X4 as the owner of the capital, the previous rate of five shareholders (SC) to measure; ε is random error that the other has not yet considered If ordinary workers human capital, macroEconomic situation, and other factors.

(C) of the data description, processing and regression analysis

This study sample has been announced for the 2006 equity incentive plan or equity incentive plan by shareholders, the implementation of the 2007 equity incentive plan listed companies, examine the performance of the company for 2007 and other indicators. Through the necessary sample screening, the exclusion of data from several loss-making enterprises, with 32 listed companies data. This data from AOL Finance and the Shanghai Stock Exchange and Shenzhen Stock Exchange website.

1. Sample Description

Table 2 data shows that China's net profit share incentive rates vary widely, but the average net profit margin higher; Management Stock index varied widely, indicating that the management of listed equity incentive levels and coverage are very different large, but the average intensity of the management equity incentive is small; of independent directors present at the meeting attendance is high, which explains to some extent independent directors play an active role in their own; In addition, the average of the top five shareholders hold shares a high rate of listed companies in China shows a high degree of ownership concentration, but the differences between individual companies are also high.

2. Multicollinearity analysis

Table 3 shows data from the various correlation coefficients between the explanatory variables do not, there is no significant multicollinearity exists. Also found that the creditors of capital associated with a small company performance.

3. Estimation model
I use OLS regression analysis of the samples, as shown in Figure 1 by the following estimates:
Figure 1 shows, the explanatory variables are not creditors of capital obtained through the 0.10 significance level when the t test, there may be many reasons, which for analysis later in this first remove the explanatory variables, so you can set the regression model To:
ln (Y) = @ + β1ln (X1) + β2ln (X2) + β4ln (X4) + ε

By re-sample regression analysis, as shown in Figure 2 the following estimates:
From the regression results found that all explanatory variables have a significant level by taking the t test 0.10, and F values ​​greater than the F0.10 (3,28). Following the model of other related tests:
(1) autocorrelation test. This is a listed company selected cross-section data, cross-sectional data do not need to self-correlation test.

(2) heteroskedasticity test. The use of White (White) test, have assisted the regression equation nR2 = 18.36150, p = 0.031204, so there is heteroskedasticity model, then OLS estimates are no longer minimum variance properties, then the fact that on the weighted least squares (WLS) is the best linear unbiased estimator (BLUE). a very common approach is to the right of direct access into the variance of the number of reciprocal, that is ωi = 1/δi2, paper weights W obtained = 1 / e ^2, the following estimates can be obtained as shown in Figure 3:
(3) of the new model heteroskedasticity test. The use of White (White) test, have assisted the regression equation nR2 = 3.745630, p = 0.927343, so the new model there is no heteroscedasticity.

(4) a new model of multicollinearity test. By analyzing the correlation coefficient between the explanatory variables we can see, the new model there is no multicollinearity.

4. Model
According to the model, the main factors affect the performance of the company is the management of human capital, independent directors who were the owners of capital and the effectiveness of the capital to play a level. Which, corporate performance management of human capital on the elasticity of 0.094957 , the independent directors on the elasticity of human capital, 0.620929, people on the owner of the elasticity of the capital -0.671285.

(D) the model for further analysis and policy recommendations
This paper obtained by regression analysis model, the creditors who did not produce the desired effect of capital, which may be due to one-sided pursuit of China's commercial banks the size of credit, credit risk and lack of safety controls, bank lending did not attach importance to post-supervision, in essence, banks were not involved in day to day management and supervision; the other hand, China's local governments sometimes act as a "guarantor" role in helping enterprises to obtain loans; and other legal entities and individuals are more concerned about the time of borrowing corporate reputation and other goodwill, rather than large emphasis on strength and other business enterprises. As in all aspects of the reason, the enterprise's creditors who have not been effective use of the capital. enterprise human capital management, independent directors on the company's human capital all play a catalytic role performance, so we want to improve the management of people holding management index to promote the utilization of the capital, while promoting independent directors level of utilization of human capital. firm performance and a negative correlation between capital owners, This is mainly due to the use of other human capital environment is not high, China's listed companies due to the special conditions, stock concentration, the owner of human capital is the only major shareholder of the owner played by human capital, then, all The role of human capital are more inclined to uphold the interests of major shareholders, which occupied the interests of other stakeholders, the owner who is no longer the capital to play the role of equity capital per unit of effectiveness, but rather to seek a substantial shareholder maximize the benefits and other special purposes, and because the other people of the capital use efficiency is not high, then the owner of one of the capital of the lack of checks and balances, the company's risks increase.


IV, Conclusion

The empirical results show that the performance of listed companies in China with the management of human capital and human capital of the independent directors of a positive correlation between the use of; of creditors who have not been effective use of the capital, with no correlation between company performance. In addition, China ownership concentration of listed companies as too high, the owner of human capital can only represent the interests of a few large shareholders, and the lack of the necessary checks and balances, resulting in performance of listed companies in China with the owners of human capital is negatively correlated. Therefore, in China Economic reform, others to enhance the appropriate level of utilization of the capital, to explore the capital of workers who make full use of the creditors human capital and promote management of human capital and human capital of the effectiveness of independent directors to play, appropriate to reduce the listed companies concentration of equity and improve the quality of owner human capital, so that people inside the company for long-term capital structure of the dynamic balance, and constantly improve the performance of listed companies.


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