Employee Overtime and Innovation Dilemma

Jingjing Yang, Di Fan and Caifu Li ()
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Jingjing Yang: Guangdong University of Foreign Studies
Di Fan: RMIT University
Caifu Li: Guangzhou College of Commerce

Journal of Business Ethics, 2025, vol. 200, issue 3, No 10, 689-713

Abstract: Abstract We examine the influence of human resource (HR) slack, specifically that accrued through employee overtime, on firm innovation in China. Leveraging textual analysis to gauge overtime levels, our findings reveal that although overtime increases innovation output, it does not enhance its quality. These results remain consistent even in firms with research and development personnel slack or those offering higher salaries. Additionally, no significant differences are observed between state-owned and non-state-owned firms in terms of overtime’s impact on innovation. Furthermore, the effect of employee overtime on innovation output is less pronounced in the manufacturing and labor-intensive industries. Our study suggests that governmental leniency towards corporate infringement of employee rights does not sufficiently boost firm competitiveness. This research contributes to the understanding of the economic implications of widespread employee overtime in emerging economies, offering valuable business ethics and policy insights for managers and regulators addressing the fundamental working hour practices.

Keywords: Employee overtime; Human resource (HR) slack; Firm innovation; Employee rights (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1007/s10551-024-05918-2

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