Exploring the HR perspective of labour productivity moderation: a panel data analysis

Purpose: A government’s most important economic policy goal is to accelerate economic progress and sustain its speed at an optimal and stable degree. This study aims to explore the non-linear relationship of labour productivity and economic progress. There are several models, which have related labour input with growth and focused on the national policy indicators, which boost human capital for growth. In this study, the interaction of labour productivity and human resource (HR) practices has been investigated on economic growth with the perspective of role of the business sector contributing towards an increase in labour productivity. Design/methodology/approach: This study used panel data models of 143 countries to assess the moderating effect of HR practices prevalent at the national level on boosting labour productivity-led economic progress. Findings: The study estimated that labour productivity forms a U-shaped relationship with economic progress and that HR practices interact positively with labour productivity to augment the economic progress of a country. Practical implications: The study provides implications to that the impact of HR practices at the organizational level, aimed at improving productivity, accumulated at the national level in terms of economic growth. A country’s government should focus on HR development policies at the organizational and country levels. Originality/value: This study is instrumental in assess how HR practices increases the labour market efficiency leading to economic growth of the country.