Date of Award

12-30-2008

Degree Type

Dissertation

Degree Name

Doctor of Philosophy (PhD)

Department

Economics

First Advisor

Dr. Bruce E. Kaufman - Chair

Second Advisor

Dr. Barry T. Hirsch

Third Advisor

Dr. Klara S. Peter

Fourth Advisor

Dr. Hyeon J. Park

Abstract

This dissertation investigates two related aspects of firms’ choice of HRM practices. The first is why some firms expend a great deal of resources on HRM practices for each employee while others spend very little; the second is the extent to which firms’ bundles of HRM practices sort into general discrete employment systems. In order to empirically address these issues, this dissertation uses an economics-based theoretical approach. The key theoretical link to economics is to treat HRM as a separate factor input in the production process, which allows me to derive an HRM input demand function. This function expresses the firm’s per employee expenditures on HRM and their choice of HRM system as a function of prices and internal and external firm characteristics. Ordinary least squares, two-stage least squares and linear quantile analysis are used to empirically estimate the HRM demand function using a unique dataset of several hundred firms collected by the Bureau of National Affairs (BNA). The regression equation is found to be statistically significant, implying firms do have an identifiable demand for HRM practices. Second, there are nine independent variables which are found to be stable determinants of the demand for per employee expenditures on HRM practices. Regarding the existence of discrete employment systems, cluster analysis is used to determine if the sets of HRM practices adopted by these firms sort into identifiable types of HRM systems. The results show that there is a discrete set of four HRM systems; however, the HRM demand function does not predict which system a firm will choose.

Included in

Economics Commons

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