Human Capital Investment and Firm Growth of Quoted Insurance Firms in Nigeria

Abstract

Human capital investment has increasingly been recognized as a critical driver of organizational growth, particularly in knowledge-intensive industries such as insurance. This study therefore examines the effect of human capital investment on firm growth of quoted insurance firms in Nigeria. Specifically, the study investigates the impact of training and development costs, salaries and wages, and employee benefits costs on firm growth. The study adopts an ex-post facto research design and relies on secondary data extracted from the annual reports and audited financial statements of selected quoted insurance firms in Nigeria over the period 2012-2024. Panel regression techniques are employed to analyse the data, taking advantage of both cross-sectional and time-series dimensions. Diagnostic tests, including multicollinearity, heteroskedasticity, and model specification tests, were conducted to ensure the robustness and reliability of the regression estimates. The findings revealed that training and development costs exert a significant positive effect on firm growth, indicating that investments in employee skill development enhance the growth prospects of insurance firms. However, salaries and wages, as well as employee benefits costs, show positive but statistically insignificant effects on firm growth, suggesting that remuneration and welfare expenditures alone may not be sufficient to drive growth without complementary productivity-enhancing strategies. The study recommends that insurance firm managers, regulators, and policymakers should prioritize effective human capital investment strategies to enhance firm growth and long-term sustainability.