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Trust-Based Work Time and Innovation: Evidence from Firm-Level Data

Olivier N. Godart, Holger Görg and Aoife Hanley

ILR Review, 2017, vol. 70, issue 4, 894-918

Abstract: The authors explore whether the introduction of trust-based working hours is related to the subsequent innovation performance of firms. Based on a panel data set of German establishments, the study uses a propensity score matching approach that considers only firms that did not use trust-based work contracts initially. Results show that firms that adopt such contracts tend to be 12 to 15% more likely to improve products and 6 to 7% more likely to undertake process innovation. These results hold when controlling for another form of flexible working-time arrangement, namely working-time accounts. Thus, the positive relationship between the adoption of trust-based working hours and innovation seems to be driven by the degree of employee control and self-management over working time, rather than by merely allowing working-time flexibility.

Keywords: trust-based work time; working time; innovation; firm performance; management practices (search for similar items in EconPapers)
Date: 2017
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