HRM practices and knowledge processes outcomes: empirical evidence from a quasi-experiment on UK SMEs in the tourism hospitality and leisure sector
This paper presents empirical evidence of the relationship between human resources practices and the effectiveness of a firm to capitalise on investment in knowledge as measured by the returns to innovation and business development expenditure. The empirical design is based on exploiting a natural experiment provided by a policy intervention that offers human resources-related support to small and medium sized enterprises in the UK Tourism Hospitality and Leisure sector. Our findings suggest that businesses that receive support on the area of staff training and development, in HR planning and in staff recruitment and retention generate 100%, 86% and 134% more revenue per pound spend on innovation and business development compared to firms that do not receive such services. Thus, in contrast to existing empirical studies in the field, this evidence supports a strong causal link between human resources and knowledge processes and sheds some light on the “black box” that describes the strategic logic between human resource management and firm performance.
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| Length: | 24 pages |
| Date of creation: | Feb 2008 |
| Date of revision: | |
| Handle: | RePEc:ehl:lserod:19636 |
| Contact details of provider: | Postal: LSE Library Portugal Street London, WC2A 2HD, U.K. Phone: +44 (020) 7405 7686 Web page: http://www.lse.ac.uk/ More information through EDIRC
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References listed on IDEAS
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- John Paul Macduffie, 1995. "Human Resource Bundles and Manufacturing Performance: Organizational Logic and Flexible Production Systems in the World Auto Industry," ILR Review, Cornell University, ILR School, vol. 48(2), pages 197-221, January.
- Heckman, James J, 1979.
"Sample Selection Bias as a Specification Error,"
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Econometric Society, vol. 47(1), pages 153-61, January.
- Heckman, James, 2013. "Sample selection bias as a specification error," Applied Econometrics, Publishing House "SINERGIA PRESS", vol. 31(3), pages 129-137.
- Colin Wren, 2002. "Evaluating the effect of soft business support upon small firm performance," Oxford Economic Papers, Oxford University Press, vol. 54(2), pages 334-365, April.
- White, Halbert, 1982. "Maximum Likelihood Estimation of Misspecified Models," Econometrica, Econometric Society, vol. 50(1), pages 1-25, January.
- Alastair Hall, 1987. "The Information Matrix Test for the Linear Model," Review of Economic Studies, Oxford University Press, vol. 54(2), pages 257-263.
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