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Impact of Human Capital Expenditure on Financial Performance of Listed Insurance Companies in Nigeria

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  • Taibat, Adebukola Atoyebi

    (University of Abuja, Nigeria)

  • Emmanuel, Okpe Onuh

    (University of Abuja, Nigeria)

  • Abdulwaheed, Bamidele Oyebisi

    (University of Abuja, Nigeria)

Abstract

This study assessed the impact of human capital expenditure on the financial performance of listed insurance companies in Nigeria. The population of the study consisted of twenty – three (23) insurance companies listed on Nigerian Exchange Group among which nine (9) companies were sampled for a period of ten (10) years from 2012 to 2021. Employee’s Salaries and wages, Employee’s Retirement Benefits, Employee’s Training Costs and Other Employee Benefits were adopted as proxies for human capital expenditure, while Profit Before Tax was adopted as proxy for financial performance. Secondary data were collected from the sampled insurance companies’ annual reports and accounts over the period of study. Panel Least Square analysis method was used to analyze the collected data. The findings of the study revealed that employees’ salaries and wages and employee’s retirement benefits have significant positive impact, and employee’s training costs and other employee’s benefits have no significant impact on the financial performance of Insurance companies in Nigeria. The study therefore, recommended that; insurance companies in Nigeria should carefully consider and invest in competitive and fair compensation packages for their employees, prioritize and enhance their employee retirement benefit packages and evaluate the cost-effectiveness of additional benefits and focus on other factors that more directly influence their financial performance.

Suggested Citation

  • Taibat, Adebukola Atoyebi & Emmanuel, Okpe Onuh & Abdulwaheed, Bamidele Oyebisi, 2024. "Impact of Human Capital Expenditure on Financial Performance of Listed Insurance Companies in Nigeria," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 8(8), pages 7-20, August.
    • Handle: RePEc:bcp:journl:v:8:y:2024:i:8:p:7-20
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    References listed on IDEAS

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    1. Niels Bosma & Mirjam van Praag & Roy Thurik & Gerrit de Wit, 2004. "The Value of Human and Social Capital Investments for the Business Performance of Startups," Small Business Economics, Springer, vol. 23(3), pages 227-236, October.
    2. Olatunji, Toyin E & Adegbite, Tajudeen A, 2014. "Investment in Fixed Assets and Firm Profitability: Empirical Evidence from the Nigerian Banking Sector," Asian Journal of Social Sciences and Management Studies, Asian Online Journal Publishing Group, vol. 1(3), pages 78-82.
    3. Gary S. Becker, 1962. "Investment in Human Capital: A Theoretical Analysis," NBER Chapters, in: Investment in Human Beings, pages 9-49, National Bureau of Economic Research, Inc.
    4. repec:dau:papers:123456789/12957 is not listed on IDEAS
    5. Olatunji Toyin E Author Work Place-Name: Nigeria & Adegbite Tajudeen A Author Work Place-Name: Nigeria, 2014. "Investment in Fixed Assets and Firm Profitability: Empirical Evidence from the Nigerian Banking Sector," Asian Journal of Social Sciences and Management Studies, Asian Online Journal Publishing Group, vol. 1(3), pages 78-82.
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