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Workplace organization and innovation

  • Cindy Zoghi
  • Robert D. Mohr
  • Peter B. Meyer

This study uses panel data on Canadian establishments to explore the relationship between the organization of work - in particular decentralization, information-sharing, and incentive pay schemes - and innovation. Like other studies, ours finds a clear positive link between these factors. However, the data give strong indications that this relationship is not causal. We show that: (1) the correlation between workplace organization and innovation holds for information-sharing but is much weaker for decentralized decision-making or incentive pay programs, (2) controls for unobserved heterogeneity significantly weaken results, and (3) lagged variables give no clear evidence that organizational changes predate innovation.

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Article provided by Canadian Economics Association in its journal Canadian Journal of Economics.

Volume (Year): 43 (2010)
Issue (Month): 2 (May)
Pages: 622-639

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Handle: RePEc:cje:issued:v:43:y:2010:i:2:p:622-639
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