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Innovation Capabilities and Firm Labor Productivity

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Author Info
Carine Peeters () (Centre Emile Bernheim, Solvay Business School, Université Libre de Bruxelles, Brussels)
Bruno Van Pottelsberghe () (Centre Emile Bernheim, Solvay Business School, Université Libre de Bruxelles, Brussels)

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Abstract

This study relies on a Cobb-Douglas production function to assess the relationship between the development of innovation capabilities by firms and their labor productivity. Intra-organizational capabilities relate to firms’ corporate culture and work organization, generation of innovative ideas and selection of projects, and innovation funding sources. Inter-organizational capabilities relate to the use of external information from vertical partners, competitors, and consultants, and to R&D partnerships with scientific institutions. In addition to the traditional effect of a growth in the ratio of physical capital per employee, both types of innovation capabilities are found to significantly increase labor productivity.

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File URL: http://www.solvay.edu/EN/Research/Bernheim/documents/wp04030.pdf
File Format: application/pdf
File Function: First version, 2004
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Publisher Info
Paper provided by Université Libre de Bruxelles, Solvay Brussels School of Economics and Management, Centre Emile Bernheim (CEB) in its series Working Papers CEB with number 04-030.RS.

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Length: 17 pages
Date of creation: Apr 2004
Date of revision:
Handle: RePEc:sol:wpaper:04-030

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Related research
Keywords: Innovation; organizational capabilities; performance; labor productivity.;

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Find related papers by JEL classification:
O32 - Economic Development, Technological Change, and Growth - - Technological Change - - - Management of Technological Innovation and R&D
O33 - Economic Development, Technological Change, and Growth - - Technological Change - - - Technological Change: Choices and Consequences; Diffusion Processes
L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
M21 - Business Administration and Business Economics; Marketing; Accounting - - Business Economics - - - Business Economics

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  1. Hall, Bronwyn H. & Mairesse, Jacques, 1995. "Exploring the relationship between R&D and productivity in French manufacturing firms," Journal of Econometrics, Elsevier, vol. 65(1), pages 263-293, January. [Downloadable!] (restricted)
    Other versions:
  2. Malerba, Franco, 1992. "Learning by Firms and Incremental Technical Change," Economic Journal, Royal Economic Society, vol. 102(413), pages 845-59, July. [Downloadable!] (restricted)
  3. Paul Geroski & Steve Machin & John Van Reenen, 1993. "The Profitability of Innovating Firms," RAND Journal of Economics, The RAND Corporation, vol. 24(2), pages 198-211, Summer. [Downloadable!] (restricted)
  4. Carine Peeters & Bruno Van Pottelsberghe, 2003. "Measuring Innovation Competencies and Performances: A Survey of Large Firms in Belgium," Working Papers CEB 04-005.RS, Université Libre de Bruxelles, Solvay Brussels School of Economics and Management, Centre Emile Bernheim (CEB). [Downloadable!]
    Other versions:
  5. Zvi Griliches, 1979. "Issues in Assessing the Contribution of Research and Development to Productivity Growth," Bell Journal of Economics, The RAND Corporation, vol. 10(1), pages 92-116, Spring. [Downloadable!] (restricted)
    Other versions:
  6. Elisabeth Kremp & Jacques Mairesse, 2004. "Knowledge Management, Innovation, and Productivity: A Firm Level Exploration Based on French Manufacturing CIS3 Data," NBER Working Papers 10237, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  7. Ichniowski, Casey & Shaw, Kathryn & Prennushi, Giovanna, 1997. "The Effects of Human Resource Management Practices on Productivity: A Study of Steel Finishing Lines," American Economic Review, American Economic Association, vol. 87(3), pages 291-313, June. [Downloadable!] (restricted)
  8. Carine Peeters & Bruno Van Pottelsberghe, 2003. "Organizational Competencies and Innovation Performances: The Case of Large Firms in Belgium," Working Papers CEB 04-006.RS, Université Libre de Bruxelles, Solvay Brussels School of Economics and Management, Centre Emile Bernheim (CEB). [Downloadable!]
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  9. Cohen, Wesley M & Levinthal, Daniel A, 1989. "Innovation and Learning: The Two Faces of R&D," Economic Journal, Royal Economic Society, vol. 99(397), pages 569-96, September. [Downloadable!] (restricted)
  10. Ritter, Thomas & Gemunden, Hans Georg, 2003. "Network competence: Its impact on innovation success and its antecedents," Journal of Business Research, Elsevier, vol. 56(9), pages 745-755, September. [Downloadable!] (restricted)
  11. Carine Peeters & Bruno Van Pottelsberghe, 2005. "Innovation Capabilities and Returns to Scale," Working Papers CEB 05-002.RS, Université Libre de Bruxelles, Solvay Brussels School of Economics and Management, Centre Emile Bernheim (CEB). [Downloadable!]
  12. Baldwin, John R. & Johnson, Joanne, 1996. "Business strategies in more- and less-innovative firms in Canada," Research Policy, Elsevier, vol. 25(5), pages 785-804, August. [Downloadable!] (restricted)
  13. Knott, Anne Marie & McKelvey, Bill, 1999. "Nirvana efficiency: a comparative test of residual claims and routines," Journal of Economic Behavior & Organization, Elsevier, vol. 38(4), pages 365-383, April. [Downloadable!] (restricted)
  14. Loof, Hans & Heshmati, Almas, 2002. "Knowledge capital and performance heterogeneity: : A firm-level innovation study," International Journal of Production Economics, Elsevier, vol. 76(1), pages 61-85, March. [Downloadable!] (restricted)
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