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Human Resource Management’s Effects on Firm‐Level Relative Efficiency
Author(s) -
CHADWICK CLINT,
AHN JIYOUNG,
KWON KIWOOK
Publication year - 2012
Publication title -
industrial relations: a journal of economy and society
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.61
H-Index - 57
eISSN - 1468-232X
pISSN - 0019-8676
DOI - 10.1111/j.1468-232x.2012.00696.x
Subject(s) - productivity , efficiency , production (economics) , stochastic frontier analysis , production–possibility frontier , human resource management , frontier , economics , industrial organization , business , labour economics , econometrics , microeconomics , statistics , management , economic growth , mathematics , archaeology , estimator , history
Using stochastic frontier production functions methodology with data from 1579 private‐sector establishments, we demonstrate that HR practices are significantly associated with differences in relative firm‐level efficiency. Supplemental analysis implies that this efficiency analysis is substantively different than the common approach to evaluating HRM’s relationships with firm‐level labor productivity. The results suggest that HR practices’ contributions to relative firm‐level efficiency are an important but heretofore overlooked factor in the relationship between HRM and firm performance.