IDEAS home Printed from https://ideas.repec.org/a/gam/jecomi/v11y2023i10p261-d1264311.html
   My bibliography  Save this article

Evaluating the Efficiency of Human Capital at Small and Medium Enterprises in the Manufacturing Sector Using the DEA-Weight Russell Directional Distance Model

Author

Listed:
  • Aldebarán Rosales-Córdova

    (Facultad de Economía y Negocios, Universidad Anáhuac México, Huixquilucan 52107, Mexico)

  • Rafael Bernardo Carmona-Benítez

    (Facultad de Economía y Negocios, Universidad Anáhuac México, Huixquilucan 52107, Mexico)

Abstract

The present research aims to analyze the efficiency of human capital in relation to sales in each of the subsectors of economic activity within Mexican small- and medium-sized enterprises in the manufacturing industry. To accomplish this, a panel data set covering the years 2009–2020 is utilized. The inputs used are investment in training, salary, and days worked, with sales as the output. Initially, due to the high variability (cv > 1) of both the inputs and the output, the information is divided into three groups by quartiles: Group 1 < 25%, Group 2 = 25–75%, and Group 3 > 75%. As a first step in the analysis, a hypothesis test identifies a significant increase in sales for those subsectors that reported investing in training compared with those that did not. As a result, for the efficiency analysis, SMEs that report not investing in training are removed from the sample. Subsequently, to confirm the statistical explanation of the inputs for the output, a regression analysis is performed. With an input-oriented DEA model, it is found that most subsectors exhibit high overall and pure efficiency (≥0.75) as well as increasing returns to scale. Interestingly, the research introduces a novel approach by proposing subgroups within SMEs, providing a more precise analysis. The findings of this study emphasize the fundamental role of human capital as a key driver of economic growth and innovation within the manufacturing sector. This research also highlights variations in efficiency among different subsectors, underscoring the need for tailored strategies for each. These results offer practical guidance for companies seeking to optimize their operations and contribute to the economic development of a developing country. In conclusion, this paper contributes both theoretically and practically to understanding the interaction between human capital and financial indicators. The results underscore the importance of investing in workforce development, ultimately promoting economic growth, improving productivity, and advancing social progress.

Suggested Citation

  • Aldebarán Rosales-Córdova & Rafael Bernardo Carmona-Benítez, 2023. "Evaluating the Efficiency of Human Capital at Small and Medium Enterprises in the Manufacturing Sector Using the DEA-Weight Russell Directional Distance Model," Economies, MDPI, vol. 11(10), pages 1-20, October.
    • Handle: RePEc:gam:jecomi:v:11:y:2023:i:10:p:261-:d:1264311
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2227-7099/11/10/261/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2227-7099/11/10/261/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Lenihan, Helena & McGuirk, Helen & Murphy, Kevin R., 2019. "Driving innovation: Public policy and human capital," Research Policy, Elsevier, vol. 48(9), pages 1-1.
    2. Gladys Lopez-Acevedo & Hong W. Tan, 2011. "Impact Evaluation of Small and Medium Enterprise Programs in Latin America and the Caribbean," World Bank Publications - Books, The World Bank Group, number 2298.
    3. Onkelinx, Jonas & Manolova, Tatiana S. & Edelman, Linda F., 2016. "The human factor: Investments in employee human capital, productivity, and SME internationalization," Journal of International Management, Elsevier, vol. 22(4), pages 351-364.
    4. José Abraham López Machuca & Jorge Eduardo Mendoza Cota, 2017. "Salarios, desempleo y productividad laboral en la industria manufacturera mexicana. (Wage, Unemployment and Labor Productivity in the Mexican Manufacturing Industry)," Ensayos Revista de Economia, Universidad Autonoma de Nuevo Leon, Facultad de Economia, vol. 0(2), pages 185-228, October.
    5. Konara, Palitha & Wei, Yingqi, 2019. "The complementarity of human capital and language capital in foreign direct investment," International Business Review, Elsevier, vol. 28(2), pages 391-404.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Alexander Rojas & Douglas Molina-Orjuela & Laura Peña-Rodríguez & Andrea Hernández-Quirama & Mauricio Rojas-Betancur & Claudia Amaya-Castellanos & Laura A. Rodríguez-Villamizar & Alvaro J. Idrovo, 2023. "Contrary Perceptions of Environmental Health and the Governance of the Bucaramanga Metropolitan Area, Colombia," IJERPH, MDPI, vol. 20(19), pages 1-13, September.
    2. Maciej Jagódka & Małgorzata Snarska, 2021. "The State of Human Capital and Innovativeness of Polish Voivodships in 2004–2018," Sustainability, MDPI, vol. 13(22), pages 1-20, November.
    3. Tulio Cravo & Caio Piza, 2016. "The Impact of Business Support Services for Small and Medium Enterprises on Firm Performance in Low -and Middle- Income Countries: A Meta-Analysis," IDB Publications (Working Papers) 94938, Inter-American Development Bank.
    4. Christoph March & Ina Schieferdecker, 2021. "Technological Sovereignty as Ability, Not Autarky," CESifo Working Paper Series 9139, CESifo.
    5. Hana Urbancová & Pavla Vrabcová, 2023. "Sustainability-oriented Innovation: Crucial Sources to Achieve Competitiveness," Journal of Economics / Ekonomicky casopis, Institute of Economic Research, Slovak Academy of Sciences, vol. 71(1), pages 46-64, January.
    6. Mathushan P & Kengatharan N, 2022. "Human Resource Management Practices And Firm Innovation: Mediating Role Of Human Capital," Management Research and Practice, Research Centre in Public Administration and Public Services, Bucharest, Romania, vol. 14(2), pages 25-36, June.
    7. Srhoj, Stjepan & Walde, Janette, 2020. "Getting ready for EU Single Market: The effect of export-oriented grant schemes on firm performance," Structural Change and Economic Dynamics, Elsevier, vol. 52(C), pages 279-293.
    8. Long Xu & Yunsheng Zhou & Liang Chen, 2024. "Digital Transformation and Breakthrough Innovation in Chinese Manufacturing Firms: Based on Ability-Motivation-Opportunity (AMO) Framework of Human Capital," SAGE Open, , vol. 14(3), pages 21582440241, July.
    9. Bauweraerts, Jonathan & Arzubiaga, Unai & Diaz-Moriana, Vanessa, 2022. "Unveiling the global focus-performance relationship in family firms: The role of the board of directors," International Business Review, Elsevier, vol. 31(4).
    10. Goxe, François & Mayrhofer, Ulrike & Kuivalainen, Olli, 2022. "Argonauts and Icaruses: Social networks and dynamics of nascent international entrepreneurs," International Business Review, Elsevier, vol. 31(1).
    11. Iovino, Felicetta & Migliaccio, Guido, 2019. "Energy companies and sizes: An opportunity? Some empirical evidences," Energy Policy, Elsevier, vol. 128(C), pages 431-439.
    12. Minna Saunila & Juhani Ukko & Tero Rantala & Mina Nasiri & Hannu Rantanen, 2020. "Preceding operational capabilities as antecedents for productivity and innovation performance," Journal of Business Economics, Springer, vol. 90(4), pages 537-561, May.
    13. Jin, Yige & Dong, Nanyan & Tian, Gaoliang & Zhang, Junrui, 2023. "Wisdom of the masses: Employee education and corporate risk taking," Economic Modelling, Elsevier, vol. 118(C).
    14. Mulligan, Kevin & Lenihan, Helena & Doran, Justin & Roper, Stephen, 2022. "Harnessing the science base: Results from a national programme using publicly-funded research centres to reshape firms’ R&D," Research Policy, Elsevier, vol. 51(4).
    15. Paloma Bernal-Turnes & Ricardo Ernst, 2024. "More Bang for Your Buck: Best-Practice Recommendations for Designing, Implementing, and Evaluating Job Creation Studies," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 15(1), pages 1889-1912, March.
    16. Caloghirou, Yannis & Giotopoulos, Ioannis & Kontolaimou, Alexandra & Korra, Efthymia & Tsakanikas, Aggelos, 2021. "Industry-university knowledge flows and product innovation: How do knowledge stocks and crisis matter?," Research Policy, Elsevier, vol. 50(3).
    17. Shahid, Pirzada Syed Rizwan, 2023. "Founder's Human Capital and the Entrepreneurial Process Duration," OSF Preprints yf6mg, Center for Open Science.
    18. Samuel Kwesi Dunyo & Samuel Amponsah Odei, 2023. "Firm-Level Innovations in an Emerging Economy: Do Perceived Policy Instability and Legal Institutional Conditions Matter?," Sustainability, MDPI, vol. 15(2), pages 1-24, January.
    19. Xiuying Ma & Fei Jia & Hong Jiang & Xiangyun Xu, 2022. "The Impact of Non-R&D Intangible Capital on TFP Growth: Evidence from Multi-country Industry Level Data," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 13(4), pages 2890-2910, December.
    20. Fernando Almeida & José Morais & José Duarte Santos, 2022. "A Bibliometric Analysis of the Scientific Outcomes of European Projects on the Digital Transformation of SMEs," Publications, MDPI, vol. 10(4), pages 1-18, September.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jecomi:v:11:y:2023:i:10:p:261-:d:1264311. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.