An Empirical Research On The Relationship Between Human Capital Investment, Physical Capital Investment And Corporate Performance

How to effectively distribute enterprises limited financial capital is an important enterprise financial management issues. Wages and capital allocation can be achieved to maximize the effectiveness. It is one of the Western Enterprise research on economic decision-making. Marxist economics have proved that residual value (profit) is created by variable capital (corporate invest in human capital), but it denied Constant Capital investment in an important role. Marx stressed that under certain conditions, enterprises should maintain a reasonable organic composition of capital. However, in fiscal this important issue was rarely discussed. A lot of research and literature of human capital investment more than about the relationship of a personal investment in human capital and economic growth, investment in human capital will be regular and apart from the physical capital investment to research, little of the research about enterprise investment in human capital, physical capital investment and the relationship between corporate performance.In this paper, I examined perspective on business investment, and combine two kinds of capital investment to analysis which financial capital investment strategies enterprises should take. My research is through comparative analysis of corporate investment in human capital, physical capital and corporate performance.Based on the Marxist labor value and capital institutions theory, as well as western economics theories as a guide, the concepts involved in a defined: enterprises human capital investment refers to expecting to increase the acquisition of money or income, financial expenditures in the training of human capital, education, as well as bonuses, wages and benefits, and is the total expenditure to cover the cost of human capital and to maintain the competitiveness of human capital. On the basis of reviewing the Marxist Capital Organic Composition Theory, Human Capital Theory and the Resource-based Theory of the Firm, I used empirical methods to study on the relationship between corporate human capital investment, physical capital investment and corporate performance. Based on manufacturing, information technology, wholesale & retail trade, real estate, social services, culture & communication and comprehensive categories in 2004 China's Shanghai and Shenzhen A-share stock markets. I listed seven sectors of company's financial data as analysis object. I used SPSS 13.0 software to analysis. Basic descriptive statistics and regression analysis was used to draw conclusions: In 2004, China's Shanghai and Shenzhen stock markets in the A-share listed companies, high stock of human capital (information technology industries and other basic social services)is characteristics that corporate performance of a high-performance human capital stock is superior to a low human capital stock. Human capital investment and corporate performance was positive relationship. Human capital investment can increase their marginal contribution to enterprise performance greater than physical capital investment. And the high human capital investment as the information technology industry more evident. Combine theoretical and empirical analysis, I recommends that companies should establish a human capital than physical capital investment concepts, raising the level of investment in human capital, the establishment of a harmonious relationship between the capital at the same time according to the characteristics of their trade, building up human capital investment evaluation mechanism to determine reasonable investment level of human capital.