Is digital human capital investment good for firm performance? The mediating role of organizational and technological resource use

In the digital transformation era, firms usually carry out the digital human capital investment to realize transformation. However, the investment in digital human capital has not received adequate attention for its effect on firm financial performance. This study aims to investigate the mechanism of the digital human capital investment in firm performance. Using listed industrial firms’ recruitment data in China, combining the Chinese Stock Market Research and China National Occupation Skill Standards, this study adopts large-scale text analysis to quantify the digital human capital investment and econometric models to investigate the mediating impacts of organizational and technological resource use. The result reveals that digital human capital investment improves firm financial performance in profitability and growth indirectly through the mediation roles of organizational and technological resource use. Furthermore, there is direct influence on growth. Given the emerging contribution of introducing digital human capital investment on technological resource use, organizational resource use and firm performance, firm managers should pay more attention to hiring, training and enhancing workforce with digital skills. Traditionally, digital human capital has been measured by disclosed information. Differently, this paper has measured the digital human capital investment from job posting perspective and empirically evaluated its effect on firm performance through organizational and technological resource use. This study contributes to the cross-field of knowledge and innovation. Moreover, the findings suggest that the use of organizational resources has a positive influence on the use of technical resources, playing a role which provides more practical implications for organization management.