The double-edged sword of overtime: nonlinear effects and mechanisms for continuous innovation

Dian Zhang and Zhichao Cheng

European Journal of Innovation Management, 2026, vol. 29, issue 4, 1419-1440

Abstract: PurposeThis study investigates “extractive human resource slack”—generated through employee overtime—and examines how it non-linearly affects continuous innovation. It further analyzes the moderating effects of internal incentives (compensation) and external governance (media oversight) to determine the conditions under which overtime supports sustainable innovation.Design/methodology/approachThis study utilizes a specific overtime measure derived from calibrated satellite nighttime light data (VNP46A2) and analyzes a panel of Chinese A-share listed firms from 2012 to 2023. An instrumental variable framework is employed to address endogeneity and rigorously estimate the causal impact of overtime intensity on continuous innovation.FindingsThe results indicate a robust inverted U-shaped relationship: moderate overtime contributes to continuous innovation, whereas excessive overtime impedes it. Mechanism analyses show that this pattern results from the interaction of innovation quality, labor productivity, and employee turnover. Furthermore, employee compensation significantly moderates the relationship, while media oversight attenuates the negative effects associated with high levels of overtime.Originality/valueBeyond conceptualizing “extractive human resource slack”, this study's primary contribution lies in using a rigorous empirical framework to identify the optimal overtime intensity for continuous innovation. It provides empirical evidence and specific managerial thresholds, offering practical guidance for organizations to balance operational demands with long-term innovation capabilities.

Keywords: Overtime; Continuous innovation; Work intensity; Organizational slack (search for similar items in EconPapers)
Date: 2026
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Persistent link: https://EconPapers.repec.org/RePEc:eme:ejimpp:ejim-11-2025-1538

DOI: 10.1108/EJIM-11-2025-1538

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