That is what friends do: employee friendliness and innovation

Hari P. Adhikari, Wonseok Choi and Nilesh B. Sah

Journal of Economics and Business, 2017, vol. 90, issue C, 65-76

Abstract: Recent literature suggests that labor related issues can impact corporate innovation. In this study we hypothesize and find that firms with congenial work environments innovate more and have greater innovative efficiency. Our results also suggest that cash profit sharing and employee involvement have a positive bearing whereas union relationships have a negative impact on innovation output of a firm. In addition, subsample analysis reveals that employee-friendly policies are more important in industries having higher employee power. Our results are consistent with the logic that happy and satisfied employees tend to be more productive than the unhappy and dissatisfied ones. Our work suggests a channel through which satisfied employees contribute towards increasing firm value − by increasing the innovation productivity and efficiency of the firm. So, firms must make continued efforts towards creating and maintaining a friendly work environment.

Keywords: Innovation; Corporate environment; Employee friendliness; Labor productivity (search for similar items in EconPapers)
JEL-codes: G30 J24 J28 O32 (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jebusi:v:90:y:2017:i:c:p:65-76

DOI: 10.1016/j.jeconbus.2016.10.004

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