Innovation Capabilities and Firm Labor Productivity

Carine Peeters () and Bruno van Pottelsberghe de la Potterie

No 04-030.RS, Working Papers CEB from Université Libre de Bruxelles, Solvay Brussels School of Economics and Management, Centre Emile Bernheim (CEB)

Abstract: This study relies on a Cobb-Douglas production function to assess the relationship between the development of innovation capabilities by firms and their labor productivity. Intra-organizational capabilities relate to firms’ corporate culture and work organization, generation of innovative ideas and selection of projects, and innovation funding sources. Inter-organizational capabilities relate to the use of external information from vertical partners, competitors, and consultants, and to R&D partnerships with scientific institutions. In addition to the traditional effect of a growth in the ratio of physical capital per employee, both types of innovation capabilities are found to significantly increase labor productivity.

Keywords: Innovation; organizational capabilities; performance; labor productivity. (search for similar items in EconPapers)
JEL-codes: O32 O33 L25 M21 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-eff, nep-ino and nep-tid
Date: 2004-04
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http://www.solvay.edu/EN/Research/Bernheim/documents/wp04030.pdf First version, 2004 (application/pdf)

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Persistent link: http://EconPapers.repec.org/RePEc:sol:wpaper:04-030

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