The Economics of Human Capital Misallocation and Long-Run Value Destruction
In modern organizations, human capital is not merely an operational resource but a strategic asset, and its misallocation results in value destruction. This paper examines human capital misallocation as a structural source of economic inefficiency. The paper assesses the long-term effects on organizational value by integrating perspectives from labor economics and corporate finance using econometric analysis. The theoretical framework is based on the perception of human capital as a semi-fixed production factor, in which structural mismatches reduce marginal productivity and distort the use of resources, resulting in negative organizational outcomes. The article develops a dynamic conceptual model that captures the mechanisms through which human capital misallocation leads to productivity losses. In conclusion, the findings indicate that inefficient human capital allocation constitutes a structural economic problem that limits the potential of organizational growth and systematically destabilizes long-term financial sustainability.
Authors
- Rosita Zvirgzdiņa (ORCID: https://orcid.org/0000-0003-2285-6662)
- Velga Vēvere (ORCID: https://orcid.org/0000-0001-9752-5353)
- Iveta Liniņa (ORCID: https://orcid.org/0000-0003-0363-2604)
- David Alimbarashvili
Institutions
- Turība University (LV)
Publication Details
- Journal
- WSEAS TRANSACTIONS ON BUSINESS AND ECONOMICS
- Published
- 2026-10-14
- DOI
- https://doi.org/10.37394/23207.2026.23.142
- Primary Topic
- Intellectual Capital and Performance Analysis
- Type
- article
- Field-Weighted Citation Impact
- 0.00