Pay more, earn more: The shared value approach and contingence of high‐tech industry

Should firms consider paying high salaries and providing attractive benefits as a cost or an investment for cultivating high-quality human capital? By considering the shared value approach and human capital theory, this study tackles the issue of companies exploiting and providing unfair salaries and benefits to nonmanagerial staff owing to the presence of information asymmetry and market friction. It explores whether this practice ultimately hinders companies from accumulating high-quality human capital and, consequently, improving performance. The sample population is drawn from 852 publicly traded companies listed on the Taiwan Stock Exchange in 2018. Employing regression models, this study reveals that paying high salaries improves firms' short-term performance. Moreover, the results partially suggest that providing attractive benefits increases firms' long-term performance. These effects are more prominent in the high-tech industry since this industry is intensely competitive, and a key asset for high-tech companies is high-quality human capital.