Big data analytics and firm performance: The effects of human capital and mediating firm capabilities

Businesses are making large investments in big data analytics initiatives to enhance firm performance, but there is a lack of understanding about the role of analytics skills. This study examines the impacts of analytics human capital (HC) and associated capabilities on firm performance. We review the recent literature on analytics along with the pertinent theories of knowledge-based view and dynamic capabilities. Based on the review, we classify analytics HC into managerial and employee analytics HC and propose that both have a positive relationship with firm performance. We also posit that strategic change capability may mediate the positive effect of managerial analytics HC on firm performance. Further, we suggest that operational efficiency capability would mediate the positive effect of employee analytics HC on firm performance. The results from a sample of Fortune 500 U.S. firms support our hypotheses. The findings confirm the positive impacts of managerial and employee analytics HC on firm performance. The results also validate the mediating effects of the associated firm capabilities. This study is among the first empirical studies to identify applicable variables for analytics and relevant capabilities, which would be valuable for future research. Further, it has implications for practice by affirming the crucial role of analytics skills for firms' managers and employees involved with analytics initiatives. • This study examines the role of human capital in the context of big data analytics. • We confirm that analytics human capital has a positive impact on firm performance. • We affirm the mediating role of strategic change capability. • This study validates operational efficiency as a mediating capability.