The Effect of Specific Human Capital on Unit Performance – A Panel Data Analysis of Basketball Teams

Despite the interest in the influence of (specific) human capital on unit performance, scholars still find the relationship ambiguous. One reason for this is that few studies acknowledge that employees might possess several kinds of specific human capital. This paper analyzes the influence on performance of both unit-specific human capital; that is, employees’ knowledge, skills, and abilities that are tailored for use in a work unit such as knowledge about a unit’s routines; and colleague-specific human capital; that is, knowledge, skills, and abilities related to employees’ colleagues such as knowledge how to interact with them. Using data from professional basketball teams, I find an inverted U-shaped relationship between unit-specific human capital and unit performance and a positive influence of colleague-specific human capital on unit performance. Moreover, colleague-specific human capital moderates the inverted U-shaped relationship between unit-specific human capital and unit performance. The study...