The impact of investment in human capital on investment efficiency: a PLS-SEM approach in the context of Bangladesh

This study aims to evaluate the impact of human capital investment, encompassing training, education, knowledge, and skills, on the efficiency of banks in Bangladesh. Utilizing a simple random sampling method, data is gathered from 309 respondents through a seven-point Likert scale. The analysis employs measurement modeling and structural equation modeling with the PLS-SEM approach. The findings reveal a positive association between human capital investment and bank efficiency. The study suggests that by investing in training, education, knowledge, and skills, banks can enhance their investment efficiency, recognizing the varying performance levels of employees. This implies a need for aligning human capital through strategic investments. Institutional investors utilize investment management frameworks to operationalize investment policies, where efficiency integrates risk, return, and total cost. The implications of this study provide actionable insights for managers, owners, decision-makers, and academicians, serving as a basis for policy dialogue. The research contributes to existing knowledge by shedding light on the relationship between human capital investment and investment efficiency, drawing from social exchange theory and resource-based view theory.