An Research On Correlation Between Executives' Human Capital And Corporate Performance Of China Listed Companies

This paper assesses the relationship between the human capital characteristics of the directors and company performance for a sample of IT industry in China listed companies. Some executives' human capital characteristics suggest their capability and effort, which partly affect their behavior and corporate performance. The empirical evidence dealing with the link between executives' human capital and performance shows that, although human capital characteristics affect corporate performance, the positive influence is not strong on China listed companies at the moment. Of all the variables on the directors' human capital, which might impact performance, we only find a positive and strong relationship between executives' tenure and performance. The explanation for the result, which is out of expectation, is that the companies do not provide proper incentive, which is caused by ambiguous confirmation to human capital property rights.Based on this conclusion, we support the following approaches to enhance the combination between executives' human capital and corporate performance. Building incentive mechanism, and from this point of view, companies necessitate to ensure rights of human capital property rights for executives. In order to flow and price in manager market, a well-considered assessing mechanism for performance on human capital property rights is indispensable.