The Mediating Role of Absorptive Capacity in the Relationship between the Dimensions of Human Capital and Organizational Performance: A Conceptual Framework for the Textile Sector of Pakistan

The textile sector is the backbone of the economy of Pakistan. This sector contributes 60% of the total export of the country. The current budget allocation is $ 640 million from 2014 to 2019. The export of textile sector is constantly declining. Pakistan faced problems in the year 2009 to 2014 as the government allocated a budget of $ 2.3 billion. There was only 15% implementation of this budget seen in Pakistan's textile industry. This sector is facing many structural problems. The major problem is in analyzing the impact and measurement of human capital. There are many variables which the researchers have investigated, like job satisfaction to organizational tenure for representing the concept of human capital at both the national and as well as firm-level. However, there is a disagreement that exists among the different researchers for selecting those indicators which can appropriately represent the concept of human capital. There are more complications when it comes to the textile firms because there are not many scholastic studies which have seriously focused on investigating the indicators of human capital, specific to the textile sector of Pakistan. However, till today, no scale or criterion is available which can help in capturing the level of the human capital in this sector. The introduction of these HC measures which will be specific to the textile sector will bridge this gap. This study will contribute to increasing the performance of the textile firms by increasing their absorptive capacity by focusing on specific human capital indicators.