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Explaining Growth Differences across Firms: The Interplay between Innovation and Management Practices

Livio Romano ()
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Livio Romano: Centro Studi Confindustria, Italy

No 2018-03, JRC Working Papers on Corporate R&D and Innovation from Joint Research Centre (Seville site)

Abstract: This paper provides first empirical evidence of the joint effects that innovation strategies and human resource management practices exert on firm growth. By exploiting unique information from a large sample of Italian manufacturing companies in the very recent years, it shows that investing in technology and implementing performance-based pay policies are both positively associated with a significant turnover, employment and labor productivity growth premium. However, their joint adoption does not necessarily sum the two effects. In particular, performance-based rewards boost growth of non-innovators and of firms pursuing relatively simple innovation strategies, centered around the acquisition of embodied technology. For firms strongly relying on R&D as an additional lever for product and process upgrading, the estimated effect of having in place monetary incentive mechanisms is null or even negative.

Keywords: Heterogeneity; Innovation; Management Practices; Firm Growth (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-bec, nep-cse, nep-eff, nep-eur, nep-ino, nep-sbm and nep-tid
Date: 2018-04
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Persistent link: https://EconPapers.repec.org/RePEc:ipt:wpaper:201803

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