Investment in human capital by a shareholder

Kimiko Terai

Applied Economics, 2024, vol. 56, issue 52, 6705-6712

Abstract: The rapid advancement of technology has prompted a gradual increase in the contribution of human capital to production. This study examined how financial resources are allocated for a firm’s investment in human capital by developing a model that incorporates a shareholder. Theoretical analysis showed that the relative negotiation strength of a firm and employees’ union does not affect the quantities of general and firm-specific human capital. It only affects the distribution of joint surplus generated by production. These results imply that human capital investment is unaffected by the weaker power of the union, as shareholders want to obtain profit from investment.

Date: 2024
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DOI: 10.1080/00036846.2023.2276077

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