Perceptions of Firm-Specific Human Capital: An empirical exploration

46 Pages Posted: 20 Apr 2013 Last revised: 29 Oct 2014

See all articles by Joseph Raffiee

Joseph Raffiee

University of Southern California - Marshall School of Business

Russell Wayne Coff

Wisconsin School of Business

Date Written: April 18, 2013

Abstract

Drawing on human capital theory, strategy scholars have emphasized firm-specific human capital as a source of sustained competitive advantage. This study challenges some critical implicit assumptions of extant theory by exploring how workers actually think about firm-specificity. We test several theoretical predictions using longitudinal data from Korea and the United States. Contrary to extant theory, we find that organizational tenure and commitment are negatively related to workers’ reported firm-specificity of their skills. Consistent with this, we also find that employees in managerial occupations report that their skills are relatively less firm-specific. Employer provided on-the-job training was not significantly linked with employee reports of firm-specificity. This may call into question the assumed relationship between firm-specific skills and sustained competitive advantage. We offer explanations for these counterintuitive findings and discuss the implications for future theoretical and empirical work on firm-specificity.

Keywords: Human capital, firm-specificity, micro-foundations

JEL Classification: J24, J41, J3, J6

Suggested Citation

Raffiee, Joseph and Coff, Russell Wayne, Perceptions of Firm-Specific Human Capital: An empirical exploration (April 18, 2013). Available at SSRN: https://ssrn.com/abstract=2253472 or http://dx.doi.org/10.2139/ssrn.2253472

Joseph Raffiee

University of Southern California - Marshall School of Business ( email )

701 Exposition Blvd, HOH 431
Los Angeles, CA California 90089-1424
United States

Russell Wayne Coff (Contact Author)

Wisconsin School of Business ( email )

975 University Avenue
Madison, WI 53706
United States

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