Eijaz Ahmed KHAN, Mohammed QUADDUS
Micro-firms are inherently different in their organisational characteristics. Specifically, human resource profiles within a micro-firm are exclusive and should, hence, be studied carefully. Therefore, grounded on resource-based view (RBV) and dynamic capability view (DCV) of firm, we attempt to answer the following questions: what are the dimensions of human capital with respect to a measurement model, and how are these dimensions linked with each other, and how do they contribute to firm performance? We use mixed method research design. In the qualitative approach, we use content analysis on relevant literature and field study findings. In the field study, this study samples 14 cases: eight restaurant owners, three NGOs, and three local government authorities via semi-structured, one-on-one personal interviews. After confirming the factors and variables with assistance from the literature review and the field study, the quantitative phase of the research is aimed at finding and validating the important variables, factors and their links. In the quantitative phase, a total of 438 survey questionnaires were completed on the service industry of micro-firms, such as restaurants, in Bangladesh. Collected data was analysed using the partial least squares structural equation modelling (PLS-SEM) approach. The results establish a clear formative dimension of demographic and psychographic factors of a micro-firm. We found a positive effect of demographic and psychographic factors on firm performance, as also a positive effect of demographic factor on psychographic factor. Further, results indicate the mediation effect of psychographic factor on firm performance. This finding is important for micro-firms because there is little integrative theoretical research about the concept of human capital and its nomological network in the micro-firm context. We thus contribute to RBV and DCV literature. These findings also improve the understanding of policy makers, NGOs and donors about the extent to which demographic and psychographic factors influence firm performance in the micro-firm context.
