Determinants of MSME Employee Economic Value: Human Resource Accounting and Human Capital Investment through Human Capital
DOI:
https://doi.org/10.54518/ebh.5.5.2026.1400Keywords:
Employee Economic Value, Human Capital, Human Capital Investment, Human Resource AccountingAbstract
Micro, Small, and Medium Enterprises (MSMEs) rely on effective management of human resources to generate greater employee economic value. Human resource accounting and human capital investment provide mechanisms for recognizing, developing, and utilizing employee capabilities, while human capital explains how these practices translate into economic value. This study examines the effects of human resource accounting and human capital investment on employee economic value, with human capital as a mediator. An explanatory quantitative design was applied to 300 MSME employees selected through stratified purposive sampling. Data were collected using structured five-point Likert-scale questionnaires and analyzed using Structural Equation Modeling based on Partial Least Squares with SmartPLS 4.0. The findings show that human resource accounting positively affects human capital and employee economic value, while human capital investment positively affects human capital but does not directly affect employee economic value. Human capital positively affects employee economic value and mediates both relationships. Mediation is weak for human resource accounting and indirect-only with inconsistent effects for human capital investment, highlighting human capital’s role in translating investment into sustainable economic value. These findings imply that MSMEs should prioritize human capital development to maximize the economic value generated from human resource practices and investments.
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