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The impact of organization capital on firm innovation

Bill Francis, Suresh Babu Mani, Zenu Sharma and Qiang Wu

Journal of Financial Stability, 2021, vol. 53, issue C

Abstract: We show that firms’ organization capital has a positive and economically important impact on innovation. Specifically, we find that firms with more organization capital have greater number of patents and receive more citations on their patents. The results are robust to alternative measures of organization capital and innovation, and endogeneity concerns. We also find that the ability to handle inherent difficulties associated with the innovation process and the reduction in managerial career concern threats are possible mechanisms through which organization capital affects firm innovation positively. These results provide strong evidence of the importance of a firm’s organization capital in their innovation process.

Keywords: Organization capital; Innovation; Patents; Citations (search for similar items in EconPapers)
JEL-codes: G31 O31 (search for similar items in EconPapers)
Date: 2021
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DOI: 10.1016/j.jfs.2020.100829

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