Stay in the Loop with CIHRS: July 2026

Organizations—especially multinational corporations (MNCs)—do not always realize comparable performance gains from investing in people across national borders. Prior research has attempted to explain such variation in the effects of high-investment human resource practices (HIHRPs) by emphasizing their fit with national cultural values, yet empirical support for this cultural fit perspective has been limited. To address this gap, we focus on national institutional factors that more directly shape how HIHRPs influence performance. Drawing on human capital resources (HCR) theory and institutional perspectives in International Business (IB), we identify two institutional conditions—national education quality and labor market flexibility—that moderate HIHRP effectiveness. We theorize that high-quality education systems enhance the HIHRPs–performance relationship by supplying workers with strong general human capital and that this effect is amplified in flexible labor markets where employees are motivated to contribute. A meta-analysis of 1,285 effect sizes from 170,938 organizations across 29 countries offers nuanced evidence: HIHRPs were more effective when national education quality and labor market flexibility were both high or both low than when they were mismatched. These findings advance comparative and strategic HRM research and guide organizations about how comprehensively or selectively to invest in managing people in what institutional contexts.