The larger the better? Moderating effect of firm size on the relationship between training and development practices and firm performance

Purpose This study aims to examine the paradoxical role of firm size in the relationship between human resource (HR) practices and firm performance. The implications of the positive role of firm size as abundant organizational resources and the negative role of firm size as coordination problems are theorized and tested. Training and development (T&D) practices are selected as the focal HR practices, given their role as the core components of advanced HR systems, such as high-performance work systems. Design/methodology/approach This study used panel data on Korean firms spanning from 2007 to 2017. The final firm-year observations were 2,565. Generalized estimating equations were utilized as panel data estimations. Findings The results show that T&D practices are more strongly associated with firm performance in larger firms than in smaller firms. Moreover, the moderating effect of firm size is more pronounced in firms managed by owner chief executive officers (CEOs) than in those managed by professional CEOs. Originality/value The findings provide new insights about the role of firm size as an enabler of HR practices by providing sufficient resources. Additionally, the study discusses practical implications for small and medium-sized enterprises and large firms managed by either owner or professional CEOs.