The Interactive Effect Of Physical Capital, Human Capital And Firm Performance

Capital can be divided into physical capital and human capital, their investment efficiency is extremely important strategic significance for business development and value realization. In the process of achieving corporate performance, the quality of physical capital investment depends on the height of human capital,,and human capital externalities affect physical capital contribution. Therefore, the optimization of human capital and physical capital is particularly important for businesses. However, in the current study, most of the research will focus on macro-economic perspective. The paper will select financial companies as samples, trying to prove that how the optimal allocation of physical capital and human capital affect on firm performance, in order to compensate for lack of relevant research, and provide a reference for corporates’ financial decisions.Based on existing literature, the paper chooses the listed companies in the financial industry as the research object and takes financial data in 2006-2013 years as the sample. This paper discuss the physical capital, human capital and company performance relationship by empirical method from microcosmic angle. The result shows: physical capital, human capital in financial sector has promoted firm performance; Because of externalities, human capital would overcome the diminishing marginal returns of physical capital rules, namely, human capital will promote the capital contribution; the higher performance business is, the more contribution of human capital investment is, however, the more low-performance businesses is, the more contribution of physical capital investment is; there is a long-term stable relationship among human capital,physical capital and business performance; due to the lag of human capital effect, physical capital is more significant to promote business performance in short time, as human capital is more significant to promote business performance in long time; the matching of human capital and physical capital has positive effect on business performance, and there is an optimal investment proportion of the matching of human capital and physical capital.