Abstract:
Human capital is nowadays considered as a key element that can be utilized to achieve
organisational objectives. Firms always try to effectively to managed their workforce through
human capital development in order to achieve not only business objectives but also business
survival and sustainability. It is important to study what factors influence the productivity of
firms and the size of the influence since the productivity of firms is recognized as the most
important factor determining economic wellbeing at the regional as well as the national level.
Firms are naturally influenced by their own attributes and resources. Thus, the study aims to
investigate the role of human capital components on labour productivity among firms in
Nigeria. The study uses Nigeria Enterprise Survey data set covering 2640 business
establishments, involved mainly in retail, food, hotel and restaurant, furniture, non-metallic
mineral products, garment and publishing, printing, and recorded media. The study used
generalized least squares to estimate the specified model. Empirical results from the study
indicate that physical capital, employee’s education, promotion, labour earnings, as well as
research and development in Nigeria were positively associated with labour productivity.
These results have important policy implications for the targeting policy prescriptions to
increase business enterprises’ productivity and competitiveness. The study recommends that
firms and government should invest more on human capital through training, education,
seminars, R&D and workshops for the continued development of business activities in Nigeria.
