Munich Personal RePEc Archive

HUMAN RESOURCE POLICIES AND FIRM INNOVATION: THE MODERATING EFFECTS OF ECONOMIC AND INSTITUTIONAL CONTEXT

Krammer, Sorin (2021): HUMAN RESOURCE POLICIES AND FIRM INNOVATION: THE MODERATING EFFECTS OF ECONOMIC AND INSTITUTIONAL CONTEXT. Published in: Technovation (30 July 2021)

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Abstract

This paper examines the effects of human resource (HR) policies on firm innovation. Specifically, we argue that firms who implement policies to stimulate job autonomy and performance-based pay will be more likely to innovate, as proxied by investments in R&D. In addition, we contend that the institutional (i.e., labour regulations) and competitive (i.e., pressure from imports) contexts in which a firm operates will affect the relationship between HR policies and innovation, albeit in different ways. We test these hypotheses using a dataset of more than 900 firms across a heterogenous set of 12 countries, majority of which are emerging markets. We find strong empirical backing for the role of both job autonomy and performance-based pay policies in stimulating firm innovation, and partial support for the moderating effects of institutional and competitive contexts of this relationship.

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