carmeli and shaubroeck

8/13/2019 Carmeli and Shaubroeck

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Introduction

In the present era, capital is relatively ac-cessible and organizations are pressingthe limits of technological means to en-hance productivity. Tangible resources

that were once competitive advantagesfor their possessors are now imperatives toremain in business. Intangible resourcessuch as HR capital appear to be the new keys

to competitive advantage. Developing HRcapital that is in harmony with the organiza-tions design and strategy is becoming, bymany reasoned accounts, the cornerstone ofcompetitive advantage (Pfeffer, 1994, 1998).Human resource practices can be a source of

competitive advantage, but unique practicesthemselves are not the main goal of strategichuman resource management (SHRM).Rather, the aim is to generate a comprehen-

HOW LEVERAGING HUMAN

RESOURCE CAPITAL WITH ITS

COMPETITIVE DISTINCTIVENESS

ENHANCES THE PERFORMANCE

OF COMMERCIAL AND PUBLIC

ORGANIZATIONS

Human Resource Management, Winter 2005, Vol. 44, No. 4, Pp. 391412

2005 Wiley Periodicals, Inc. Published online in Wiley InterScience (www.interscience.wiley.com). DOI: 10.1002/hrm.20081

A B R A H A M C A R M E L I A N D J O H N S C H A U B R O E C K

Although scholars agree that complex relationships between organizations

actual human resources (i.e., human capital stock) and means of leveraging

these resources may influence performance, little empirical work has tested

such propositions directly. We collected two primary data sets from private-

and public-sector organizations in Israel. The multiplicative interaction be-

tween perceived human resources capital and distinctive value derived from

that HR capital was significantly related to various measures of perceived

and objective organizational performance. Having higher levels of human re-

sources capital was strongly associated with performance only when top

managers perceived that these resources provided distinctive value in terms

of being highly valuable, inimitable, rare, and nonsubstitutable. We discuss

the implications of these findings for research on strategic human resource

management and the resource-based view of competitive advantage, as well

as for practical efforts to develop firm-specific human resource capital that is

inherently distinctive. 2005 Wiley Periodicals, Inc.

Correspondence to: Abraham Carmeli, PhD, Graduate School of Business Administration & Department of Politi-cal Science, Bar-Ilan University, Ramat Gan 52900, Israel, Tel: +972-3-5318917, [email protected]


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How Human Resource Capital Enhances the Performance of Organizations 393

substitutable are predicted by the RBV to re-sult in a sustainable competitive advantage(Barney, 1991).

An organization can potentially derive acore competence from its stock of HR capital.The stock of HR capital is the domain of po-tential core competence that is of interest toour research. Core competencies refer to theparticular skills and resources an organiza-tion possesses and the superior way in whichthey are used (Reed & DeFillippi, 1990, p.90). That is, core competencies are areas ofcompetitive proficiency and excellence thatare not relinquished by emerging competi-tion and that distinguish the organizationstrategically from its competitors (Leonard-Barton, 1992). Unlike other important orga-nizational resources (e.g., information tech-

nology and human resource practices), HRcapital is a potential domain in which valu-able idiosyncratic characteristics can be de-rived (Barney, 1991; Winter, 1988). As notedby Lado and Wilson (1994), firm-specifichuman capital enhances the productive ca-pacity of human resources; it is not widelyavailable in the external labor market; and aviable substitute is not available without in-curring high costs.

The potential inimitability and value ofHR capital stock may be understood by con-

sidering its relationship with organizationstrategy and the broader organization de-sign. Such synergetic relationships create acomplex system that is imperfectly imitable(Rivkin, 2000; Siggelkow, 2002). A particularstock of human capital is valuable only if itis aligned with design and strategy, meaningthat the attributes of the workforce mutuallyreinforce the organizations culture, struc-ture, and strategy (see Wright, Smart, &McMahan, 1995). As stated by Delery andShaw (2001), A high KSA [knowledge, skills,

and abilities] work force might not necessar-ily be a high productivity work force [i.e., acompetitive advantage], if that work force isnot highly motivated or is not given the nec-essary freedom and resources to do theirjobs (p. 175). Thus, management practicescan leverage HR capital by developing it inways that are uniquely suited to the particu-lar organizations design and strategy.

No matter how impressive an organiza-tions stock of human capital may appear toexternal observers, judging its value and inim-itability is possible only if one understandsthe complex and often subtle means by whichthese resources leverage other elements of thedesign and strategic direction of the organiza-tion. Thus, from an external perspective, therelationship between an organizations work-force and its success is more causally ambigu-ous than it is to the internal architects of thedesign and strategy. The competitive advan-tage inherent in an organizations HRM capi-tal therefore may best be gaugedby soliciting the assessments of in-dividuals who can most accuratelyevaluate the extent to which thatresource effectively leverages the

organization design and strategy.For example, Lepak and Snell(2002) measured the distinctive-ness of HR capital by queryingmanagers about the uniqueness(rareness, inimitability, nonsubsti-tutability) and value of individu-als skills in particular employ-ment modes (e.g., temporarywork) within their organizations.When describing superior HR cap-ital, scholars refer mostly to the

levels and types of education,knowledge, skills, ideas, and expe-rience (e.g., Farjoun, 1994; Hitt, Bierman,Shimizu, & Kochhar, 2001).

HR Capital, Distinctive Value, andPerformance

Hereafter, in lieu of sustainable competitive ad-vantage, we use the label distinctive value toreference top managers perspectives on therareness, uniqueness, inimitability, and non-

substitutability of HR capital and other in-tangible resources in their own organiza-tions. That is, distinctive HR capital isdefined as the unique, costly-to-copy, andnonsubstitutable set of HR skills, knowledge,experience, and abilities that is specific toand controlled by a particular organization.Whether such characteristics ultimately pro-vide a sustainable competitive advantage is a

Management

practices can

leverage HR capital

by developing it in

ways that are

uniquely suited to

the particular

organizations

design and strategy.


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394 H UMANRESOURCE MANAGEMENT, Winter 2005

challenging empirical question that only canbe addressed in the longer term and withsubstantial experimental control. An organi-zation may have strong HR capital eventhough it has not yet developed a distinctivevalue for this capital because it has not effec-tively leveraged its design with its human re-sources. Likewise, a superior HR system de-sign may not prove effective until the designstrengths succeed in acquiring a high-qualitystock of human capital through recruitment,selection, socialization, training and devel-opment, and other HR levers.

Thus, we suggest that organi-zations can expect to reap per-formance benefits only whenstrong HR capital is combinedwith a distinct value gained from

how this capital is utilized. Assuggested by Boxall and Steen-eveld (1999), Human resourceadvantages should be greater . . .to the extent firms exploit the po-tential of outstanding humancapital through superior manage-ment processes which facilitatesuch valuable routines as [exam-ples of processes they observed in

a particular professional industry] (p. 460).In summary, a strong stock of human

capital is necessary for above-normal per-formance, but it is not sufficient. Given astrong HR capital stock, the organizationalso must effectively leverage it against thedesign and strategic orientation of the or-ganization. We suggest the following hy-pothesis concerning the interaction betweenthese variables in predicting performance:

Hypothesis 1. There will be a significant interac-tion between HR capital and the distinctivevalue of HR capital in predicting organiza-

tional performance; the positive relationshipbetween HR capital and organizational per-formance will be stronger when the distinc-tive value of HR capital is high.

Generalizability of the Model

A review of the literature located 14 studiesfocused explicitly on the RBV, HRM-related

independent variables, and organizationalperformance. Many researchers have arguedthat they were theoretically grounded in theRBV, and yet their empirical focus was on themain effects of a resource variable, such asHR practices, on performance (see Wright etal.s [2001] review). Other studies have ex-amined the moderating effects of type ofbusiness strategy (Hitt et al., 2001; Khatri,2000; Koch & McGrath, 1996) and degree ofemployee involvement in decision making(e.g., Wright, McCormick, Sherman, &McMahon, 1999) on the relationships be-tween HR capital and organizational finan-cial performance. Because the different sub-sample effects can be logically attributed tothe theoretical processes, these studies havehelped to advance the notion that the

posited resource variable(s) are plausiblecauses of performance.Our review of the literature identified

only one study, King and Zeithaml (2001),that explicitly tested the interaction betweenresource competencies and distinctive valueas formulated within the RBV. In a very richstudy that involved in-depth interviews ofmultiple informants from 17 organizations,results largely supported their model. Wetested whether these constructs interact inpredicting a wide range of performance in-

dexes in the manner formulated by the RBVamong a larger number of business organiza-tions. We then attempted to replicate thefindings, which were revealed in the study ofbusiness organizations, using a sample fromthe public sector.

Private-Sector Analysis (Study 1)

Method

Sample and ProceduresA stratified random sample of Israeli organi-zations was drawn from Israeli commercialcompanies listed in Duns Guide to Israels Top15,000 Businesses (1998 edition). The sam-pling frame was stratified by industry andcompany size. The sampling frame includedboth publicly traded and private companies.Although testing the RBV within a single in-

A strong stock of

human capital is

necessary for

above-normal

performance, but it

is not sufficient.


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dustry has several advantages (Dess, Ireland,& Hitt, 1990, p. 13), we sought to increasethe potential generalizability of our findingsby targeting a diverse sample of firms. Onlya few empirical investigations (e.g., Robins &Wiersema, 1995) have studied companiesfrom a variety of industries. A questionnairewas mailed to the chief executive officer(CEO) or the president of the organizationand returned to a university address using aself-addressed reply envelope. In a cover let-ter, we asked the CEOs/presidents to asktheir senior executives to complete the sur-vey if they were unable to do so. One hun-dred and sixty-six surveys were returned,yielding a response rate of 20.7%. Nine ques-tionnaires were excluded from the analysisdue to substantial missing data. The mean

age of the organizations was 23.79 years(standard deviation = 16.71), and their meansize, measured by number of employees, was243.10 (standard deviation = 809.46).Among the respondents, 5.9% were female,81.1% were CEOs (others held the positionof vice-presidents), 91.5% held at least agraduate degree, the mean age was 48.06(standard deviation = 7.70), and the meanorganizational tenure was 5.98 years (stan-dard deviation = 4.90).

Measures

Dependent Variables

Organizational performance. Organizationalperformance was measured using the follow-ing single item indexes: (1) overall financialperformancea measure that represents theoverall financial soundness of the organiza-tion relative to its competitors, (2) return onequity (ROE)the ratio of net profit to theaverage of beginning and year-end equity;

(3) quality of the organizations products/servicesa measure that represents the de-gree of the quality of the organizationsproducts and/or services relative to its com-petitors, and (4) customer satisfactionameasure that reflects the degree to which theorganization fulfills the customers needscompared with its competitors. Corporateleaders were asked to use these criteria to rate

their organizations performance relative tothe performance of all competitors duringthe current and previous year. Each item wasassessed on a five-point scale (1 = muchworse than competitors, 2 = worse than com-petitors, 3 = as good as competitors, 4 = bet-ter than competitors, and 5 = much betterthan competitors).

Independent Variables

HR capital. This measure was indexed ac-cording to perceived levels of education,training, work experience, andskills of the entire employeemembership of the organization.The four items ( = .81) were: (1)Our employees have suitable ed-

ucation for accomplishing theirjobs successfully; (2) Our em-ployees are well trained to accom-plish their jobs successfully; (3)Our employees hold suitablework experience for accomplish-ing their jobs successfully; and(4) Our employees are wellskilled professionally to accom-plish their jobs successfully.

Distinctive value of HR capital. This measure

was assessed by querying leaders about fourconditions that Barney (1991) asserts mustbe met for a resource to generate sustainedcompetitive advantage. These conditionsoccur when the HR competencies havevalue, and are rare, inimitable, and nonsub-stitutable. Lepak and Snell (2002) used a sim-ilar index to measure value and unique-ness of human capital. Respondents wereasked to assess the HR capital according tothese four criteria, using a separate item foreach of the four dimensions ( = .81). These

items were each rated on a nine-point con-tinuum. The structure and the content ofthese items are provided in Appendix A.

Control variables. The analyses controlled fortechnological environment and organiza-tional size. In order to control for extraneousvariance introduced by combining industrieswith differing technological environments,

The mean age of the

organizations was

23.79 years, and their

mean size,

measured by number

of employees, was

243.10


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we categorized companies into three indus-trial groups: high-tech, mid-tech, and low-tech. The high-tech group included biotech-nology and pharmaceuticals, the mid-techgroup contained plastics and electronicscommerce, and the low-tech group includedfood and steel. The high-tech subsample wascomposed of 51 organizations, and therewere 33 and 74 organizations in the mid-techand low-tech groups, respectively. Technolog-ical environment was represented in theanalyses using an interval variable codedwith values of 0 (low-tech), 1 (mid-tech), and2 (high-tech).1 Two researchers familiar withthe Israeli businesses independently codedeach company. They agreed on 83% of thecoding. The remaining disagreements were

resolved through discussion. Size was meas-ured as the number of employees in each or-ganization as reported in the Dun guidebook.

Results

Based on factor analysis results, we averagedthe variables to form a composite index la-beledFinancial Performance; quality of the or-ganizations products/services and customersatisfaction also were averaged to form acomposite labeled Service Performance.2

The HR capital and HR capital-DV vari-ables were mean-centered, as is suggested forvariables that are to be constituents of prod-uct terms (Aiken & West, 1991). To test Hy-pothesis 1, we first entered the control vari-

Private-Sector Analysis (Study 1):

Item HR Capital HR Capital-DV

Educated employees 0.90 0.04

Experienced employees 0.84 0.05

Trained employees 0.81 0.03

Skilled employees 0.60 0.03

HR value 0.03 0.85

HR rareness 0.02 0.84

HR inimitability 0.17 0.75

HR nonsubstitutability 0.05 0.75

Valid N= 157

Public-Sector Analysis (Study 2):

Educated employees 0.83 0.22

Experienced employees 0.90 0.14

Trained employees 0.87 0.19

Skilled employees 0.85 0.19

HR value 0.10 0.63

HR rareness 0.23 0.70

HR inimitability 0.03 0.73

HR nonsubstitutability 0.23 0.51

Valid N= 106

T A B L E I Principal Component Analysis with Varimax Rotation


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ables of organizational size and technologi-cal environment (see Table III). HR capitaland HR capital-DV were entered at the sec-ond step. HR Capital was significantly re-lated to service performance (p < .001), but itwas not related to financial performance. HRcapital-DV was not significantly related toeither performance index.

The HR capital X HR capital-DV productterm variable was entered at the next step.

For both performance outcomes, the productterm effect was significant and positive insign. The product variable explained 3% ofthe variance in both financial performanceand service performance. As shown in Fig-ures 1 and 2, among organizations that re-ported low HR capital-DV, the perceivedquality of the organizations stock of HRCapital had virtually no relationship withservice performance and it had a negative re-

Variable Mean SD 1 2 3 4 5 6

1. Financial Performance 3.78 .61 (.70)

2. Service Performance 3.78 .56 .11 (.72)

3. HR Capital 3.78 .57 .01 .33 (.81)

4. HR Capital-Distinctive Value 6.55 1.72 .01 .13 .01 (.80)

5. Technological Environment 0.02 0.87 .14 .14 .14 .13

6. Organizational Size 248.5 821.6 .17 .07 .12 .04 .03

N= 157.

Critical value of rfor all variables = .17 (p< .05; two-tailed test).

Alpha reliabilities are in parentheses.

T A B L E I I Study 1 Means, Standard Deviations (SD), Alpha Reliabilities, and Correlations

Financial Performance Service Performance

Variable Step 1 Step 2 Step 3 Step 1 Step 2 Step 3

Technological Environment .14* .15 .17* .13 .17* .15*

Organization Size .16* .17* .15* .07 .04 .02

HR Capital .07 .09 .35*** .33**

HR Capital (DV) .01 .01 .13 .12

HR Capital HR Capital DV .16* .17*

R2 .05 .05 .08 .02 .16 .19

R2 .05 .00 .03 .14 .03

Ffor R2 3.89* .43 4.23* 1.92 12.43* 5.71*

Degrees of freedom 2, 153 4, 151 5, 150 2, 155 4, 153 5, 152

DV = distinctive value.

* p< .05, ** p< .01, *** p< .001.

T A B L E I I I Study 1 Results of Hierarchical Regression Analysis: Effects of HR Capital and HR Capital-DV


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lationship with financial performance.Among organizations that reported low HRcapital-DV, HR capital was positively associ-ated with the performance measures. Thesepatterns indicate that Hypothesis 1 was sup-ported for both outcomes.

Public-Sector Analysis (Study 2)The second study was conducted slightlymore than one year after Study 1. In Study 2,we sought to test the generalizability of thehypothesized model to a distinct populationof organizations seldom addressed in studiesof competitive advantage. Specifically, thestudy investigated whether HR capital anddistinctive value of HR capital are also of im-

portance to public-sector organizations, andwhether these variables interact as hypothe-sized in the first study.

Although it is not widely portrayed inthe media, local-level governmental authori-ties are in competition with one another.Economic competition among local govern-mental authorities (e.g., counties and munic-

ipalities in the United States, prefectures inJapan), hereafter labeled local authorities,is driven by the desire to increase revenuesand decrease costs in order to enable morepolicy options. To generate additional rev-enue, local authorities seek to attract busi-nesses or development projects and residentswith high socioeconomic status. Intergov-ernmental competition is reflected by a

FIGURE 1. Interaction Between HR Capital and Distinctiveness in HR Predicting Service Performance(Private-Sector Analysis)


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growing use of incentives, such as tax breaksand public financing of private projects.Israels local authorities are not significantlydifferent in operation, strategy, or adminis-tration from their American counterpartsand those elsewhere in the world. The com-petition among local governments pressurestheir political leaders to deliver higher-valueservices to the public (see Carmeli & Tishler,2004b). Hecht (2002) provided evidenceabout the increasing competition and other

sources of environment uncertainty amongIsraels local authorities. He also describedhow local authorities varied significantly intheir quality of human capital, and heshowed that their leaders have accordinglyinitiated significant organizational changesusing the private sector as a model forchange in response to increasing uncer-tainty. Muldrow, Buckley, and Schay (2002)

described how public-sector managers in theUnited States face a similar dynamic ofchange that demands more astute manage-ment of human capital.

Method

Sample and Procedures

The target population consisted of 263 localauthorities in Israel. The Israeli municipal

structure is organized into three legal sta-tuses that define forms of local authorities:municipality (city), local council, and re-gional council. Municipalities and localcouncils have similar traits and power. Bothhave responsibility for one smaller settle-ment, but the local councils tend to have asmaller jurisdiction than municipalities. Re-gional councils have responsibility for more

FIGURE 2. Interaction Between HR Capital and Distinctiveness in HR Financial Performance(Private-Sector Analysis)


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than one settlement. One hundred andtwelve local authorities participated, repre-senting an overall response rate of 42.6%. Ofthe target population, 24 (of 53 in the na-tion45.3%) were regional councils, 63 (of148 in the nation42.6%) were local coun-cils, and 25 (of 62 in the nation40.3%)were municipalities. Six localities were ex-cluded from the analyses due to missing dataon one or more of the analysis variables, andthus the final sample included 106 organiza-tions. The average size of the local authori-ties was 20,735 residents.

Control variables were size(number of residents), localitystatuses (municipality, local or re-gional council), and financial per-formance variables obtained from

reports of the Israel Central Bu-reau of Statistics, using data of theSocial Science Data Archive(SSDA) of the Hebrew Universityof Jerusalem, and from an Israelgovernment report (Ministry ofthe Interior, 2001). We collectedoriginal survey data for the re-maining variables by mailing sur-veys to the elected heads (may-

ors) of the local authorities. These surveyswere returned to a university address, using a

self-addressed reply envelope. These vari-ables are HR capital, HR capital-DV, and or-ganization performance in education, wel-fare, and emergency services. Respondentswere assured their responses would remainanonymous and confidential.

Measures

We used several measures to evaluate theperformance of the local government au-thorities. These measures (financial perform-

ance, educational, welfare, and emergencyservices) reflect key criteria upon which localgovernment authorities are evaluated. Finan-cial performance was measured using the fol-lowing variables collected and reported bythe Ministry of the Interior (2001):

1. Self-income ratio: This is the ratio be-tween all the income generated through

activities of the authority and the overallincome of the regular budget. Self-in-come consists of all the income (taxes,grants, and fees) that the local authoritydirectly collects from the residents, busi-nesses, and other assets within its juris-diction. Income of the regular budgetconsists of property taxes, fees, sur-charges, general grants, finances fromministries, and single sources of income(Carmeli, 2002; Hecht, 1997). Our sam-ple mean self-income ratio of 44.6% ap-proximated the entire population oflocal authorities in Israel that year(41.9%).

2. Collecting efficiency ratio: This is the ratiobetween the total amount of funds col-lected and the total amount of munici-

pal tax that could be collected. Thefunds collected consist of property tax,water, and drainage charges. The totalamount of funds remaining after collec-tion consists of accumulated debt fromearlier years, and the current year debtminus exemptions, discounts, and thecancellation of self-incomes (Carmeli,2002; Hecht, 1997). Our sample meancollecting efficiency ratio was 59.2%,which closely matches the entire popu-lations mean of 58.0%. These latter two

indexes provide a strong representationof the overall financial performance ofIsraels local authorities (see Carmeli,2002).

The education services measure includedeight items ( = .91) representing the qualityof the education within a local authority. Asample item is rate of students quitting be-fore completing a twelve-year education.Welfare services was measured with four items(a = .89) evaluating the municipal welfare

service system. A sample item is care forpoor residents. Emergency services consistedof three items ( = .71) assessing the servicein cases of emergency. Respondents rateditems for each of the latter three variablesover the past and current year, using a five-point scale: 1 = much worse than competi-tors (other local government authorities), 2 =worse than competitors, 3 = as good as com-

We used several

measures to

evaluate the

performance of the

local government

authorities.


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petitors, 4 = better than competitors, and 5 =much better than competitors.

We used the same scales as those used inthe private-sector analysis (Study 1) to meas-ure HR capital ( = .90) and distinctive valueof HR capital (HR Capital-DV; = .72). TheHR capital-DV items used a five-point (versusnine-point) interval scale for this study, how-ever. The analyses controlled for size (num-ber of permanent residents) and the localitystatus (municipality, local council, and re-gional council). The number of residentsbetter indexes the scale of operations of alocal authority than employee membershipsize (Razin, 1999). Locality type was indexedby an effect-coded (Cohen & Cohen, 1983)variable. Local councils were coded 1, andthe municipalities and regional councils

were coded as 0 and +1, respectively.

Results

Based on factor analysis results,3 collectingefficiency ratio and self-income ratio wereaveraged to form a composite index labeledFinancial Performance. The number of perma-nent residents (size of the community) cor-related positively and significantly with fi-nancial performance (p < .05), but not theother performance indexes (see Table V).

This finding is consistent with results of pre-

vious studies showing that, compared tosmaller public authorities in Israel; largerlocal authorities have better financial stand-ing (e.g., Razin, 1999).

We first entered the control variables ofsize and type of local authority (see Table V).These control variables explained between2% (welfare service performance) and 6% (fi-nancial performance) of the variance in per-formance outcomes. HR-capital and HR cap-ital-DV were entered at the next step.HR-capital was significantly related to allfour performance indexes (p < .01 to .001).

As in the private-sector analysis (Study1), the HR capital and HR capital-DV vari-ables were mean-centered. The HR capital XHR capital-DV product term variable was en-tered at the second step to test Hypothesis 1.

For three of the four performance outcomes,the product term effect was significant andpositive in sign. The significant product termeffects ranged in magnitude from explainingan additional 3% of the variance in financialperformance (p < .05) to an additional 8% ofthe variance in emergency service perform-ance (p < .001). Welfare service performancewas the only index for which the productterm effect was not statistically significant (p

< .17).The cut values for the high and low states

on the moderator variable (HR capital-DV)

Variable Mean SD 1 2 3 4 5 6 7 8

1. Financial Performance 0.00 .89 (.76)

2. Education Service 3.54 .79 .57 (.91)

3. Welfare Service 3.48 .80 .40 .49 (.89)

4. Emergency Service 3.22 .81 .45 .56 .49 (.71)

5. HR Capital 3.46 .71 .23 .50 .27 .42 (.90)

6. HR Capital-DV 3.56 .64 .17 .27 .10 .25 .42 (.72)

7. Type of Local Authority 0.36 .81 .15 .16 .10 .06 .07 .15

8. Size (No. Residents) 20356 39634 .20 .11 .08 .06 .11 .03 .25

N= 106; DV = distinctive value.

Critical value of r= .20, (p< .05; two-tailed test).

T A B L E I V Study 2 Means, Standard Deviations (SD), Alpha Reliabilities, and Correlations


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Education

Welfar

e

Emergency

FinancialPerformance

ServicePerformance

ServicePerformance

ServicePerfo

rmance

Variable

Step1

Step2

Step3

Step1

Step2

Step3

Step1

Step2

Step3

Step1

Ste

p2

Step3

TypeofLocalAuthority

.18

.20*

.19*

.18

.13

.13

.12

.11

.11

.06

.02

.20

Size(Residents)

.11

.08

.08

.00

.00

.00

.00

.00

.00

.00

.00

00

HRCapital

.22**

.30**

.52***

.63***

.33**

.40**

.46

***

.61***

HRCapital-DV

.06

.03

.06

.02

.05

.08

.09

.04

HRCapital

HRCapital-DV

.19*

.40**

.26

.55***

R2

.06

.12

.15

.03

.27

.32

.02

.10

.11

.03

.23

.29

R2

.06

.06

.03

.03

.24

.05

.02

.08

.02

.03

.19

.08

FforR2

3.24*

3.88*

3.80*

1.68

16.66***6.58**

1.06

4.16*

1.98

1.55

12.34***11.42***

Degreesoffreedom

2,104

4,102

5,101

2,102

2,100

1,99

2,102

2,100

1,99

2,102

2,100

1,99

DV=distinctivevalue.

#Coefficientsareunstandardized.

*p

carmeli and shaubroeck

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