Labor outsourcing and corporate human capital investment

Ying Wu

International Journal of Manpower, 2026, vol. 47, issue 4, 573-593

Abstract: PurposeThis paper examines the effect of labor outsourcing on corporate human capital investment.Design/methodology/approachUsing a large sample of Chinese listed firms from 2015 to 2024, this paper uses the job training expense to measure corporate human capital investment and uses a dummy variable to indicate whether a firm engages in labor outsourcing in a given year. To establish a credible causal relationship between labor outsourcing and corporate human capital investment, I apply propensity score matching and employ the two-stage least squares method.FindingsI find that labor outsourcing increases corporate human capital investment. This finding is robust to a battery of sensitivity tests and is more attenuated for firms facing intense product market competition, for firms with severe financial constraints, and for firms with higher managerial myopia.Originality/valueThis paper provides new insights into the role of labor outsourcing by incorporating human capital investment in a developing country context.

Keywords: Labor outsourcing; Human capital investment; Managerial myopia; Product market competition (search for similar items in EconPapers)
Date: 2026
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Persistent link: https://EconPapers.repec.org/RePEc:eme:ijmpps:ijm-08-2025-0667

DOI: 10.1108/IJM-08-2025-0667

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