Human capital efficiency and company performance: empirical evidence from Macedonian companies

Abstract

With the saturation of the labor market due to global competition, information technology, and recent downturns in economies around the world, human capital is gaining particular attention. Humans can learn, change, and innovate and thus enable the organization to survive in the long run. The main reason people are employed in a particular organization is to produce and sell products or services that will generate revenues higher than costs. The generation of higher income than expenses, as well as the reduction of the number of resources consumed for production and other operating processes, makes them contributors to the companies’ profits. The purpose of this paper is to investigate the relationship between human capital and company performance in the Macedonian real sector, by using pooled OLS regression and Fixed and Random Effect models to analyze a cross-sectional sample of 42 Macedonian companies listed on the Macedonian Stock Exchange during 2016-2021(N=252).