IDEAS home Printed from https://ideas.repec.org/a/sae/jinter/v34y2022i2p228-249.html
   My bibliography  Save this article

How Do Human Resource Management Practices Affect Innovation of Small- and Medium-sized Enterprises in a Transition Economy?

Author

Listed:
  • Vu Hoang Nam
  • Hiep Ngoc Luu

Abstract

Small- and medium-sized enterprises (SMEs) are one of the engines for inclusive economic growth. Yet little is known about the contribution of human resource management (HRM) practices to the success of SMEs. This study empirically examines how HRM practices determine different categories of innovation of SMEs in the context of a transition economy. Using a longitudinal dataset and applying the instrumental variable methodology to correct for endogeneity problems, our study uncovers that HRM practices positively affect the quality of employed human and physical capital assets of SMEs. More importantly, we find that that HRM practices significantly contribute to the launch of new products and improvement of existing products. In addition, we also find that the adoption of HRM practices facilitate labour productivity and value added. Taken together, these findings highlight that HRM practices are a strategic resource for innovation and development of SMEs in transition economies by rewarding them with higher-quality capital assets. JEL: L25, O15, O31

Suggested Citation

  • Vu Hoang Nam & Hiep Ngoc Luu, 2022. "How Do Human Resource Management Practices Affect Innovation of Small- and Medium-sized Enterprises in a Transition Economy?," Journal of Interdisciplinary Economics, , vol. 34(2), pages 228-249, July.
    • Handle: RePEc:sae:jinter:v:34:y:2022:i:2:p:228-249
    DOI: 10.1177/02601079211032119
    as

    Download full text from publisher

    File URL: https://journals.sagepub.com/doi/10.1177/02601079211032119
    Download Restriction: no
    File URL: https://libkey.io/10.1177/02601079211032119?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Manjari Singh & Neharika Vohra, 2009. "Level of Formalisation of Human Resource Management in Small and Medium Enterprises in India," Journal of Entrepreneurship and Innovation in Emerging Economies, Entrepreneurship Development Institute of India, vol. 18(1), pages 95-116, March.
    2. Ferligoj, Anuska & Prasnikar, Janez & Jordan, Vesna, 1997. "Competitive Advantage and Human Resource Management in SMEs in a Transitional Economy," Small Business Economics, Springer, vol. 9(6), pages 503-514, December.
    3. Andries de Grip & Inge Sieben, 2005. "The effects of human resource management on small firms' productivity and employees' wages," Applied Economics, Taylor & Francis Journals, vol. 37(9), pages 1047-1054.
    4. Keijiro Otsuka, 2006. "Cluster‐Based Industrial Development: A View From East Asia," The Japanese Economic Review, Japanese Economic Association, vol. 57(3), pages 361-376, September.
    5. Anastasia A. Katou, 2012. "Investigating reverse causality between human resource management policies and organizational performance in small firms," Management Research Review, Emerald Group Publishing Limited, vol. 35(2), pages 134-156, January.
    6. World Bank, 2020. "World Development Report 2020," World Bank Publications - Books, The World Bank Group, number 32437.
    7. Le Chien Thang & Truong Quang, 2005. "Human Resource Management Practices in a Transitional Economy: A Comparative Study of Enterprise Ownership Forms in Vietnam," Asia Pacific Business Review, Taylor & Francis Journals, vol. 11(1), pages 25-47, March.
    8. World Bank, 2019. "World Development Report 2019 [Rapport sur le développement dans le monde 2019]," World Bank Publications - Books, The World Bank Group, number 30435.
    9. David E. Guest, 1987. "Human Resource Management And Industrial Relations[1]," Journal of Management Studies, Wiley Blackwell, vol. 24(5), pages 503-521, September.
    10. Tetsushi Sonobe & Keijiro Otsuka, 2014. "Cluster-Based Industrial Development," Palgrave Macmillan Books, Palgrave Macmillan, number 978-1-137-38511-6, December.
    11. Tetsushi Sonobe & Keijiro Otsuka, 2006. "The Development of Industrial Clusters in East Asia," Palgrave Macmillan Books, in: Cluster-Based Industrial Development, chapter 2, pages 22-34, Palgrave Macmillan.
    12. Robert L. Heneman & Judith W. Tansky & S. Michael Camp, 2000. "Human Resource Management Practices in Small and Medium-Sized Enterprises: Unanswered Questions and Future Research Perspectives," Entrepreneurship Theory and Practice, , vol. 25(1), pages 11-26, October.
    13. Tran Dieu, 2006. "Greening Food Processing Industries In Vietnam: Opportunities And Constraints," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 8(2), pages 229-249, May.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Dai, Ruochen & Mookherjee, Dilip & Quan, Yingyue & Zhang, Xiaobo, 2021. "Industrial clusters, networks and resilience to the Covid-19 shock in China," Journal of Economic Behavior & Organization, Elsevier, vol. 183(C), pages 433-455.
    2. Ka Lin & Aisha Ayaz & Lizheng Wang, 2021. "Measuring the Feature of “The Global”: A Framework for Analyzing the Global City Ranking," Sustainability, MDPI, vol. 13(8), pages 1-14, April.
    3. Mano, Yukichi & Njagi, Timothy & Otsuka, Keijiro, 2022. "An inquiry into the process of upgrading rice milling services: The case of the Mwea Irrigation Scheme in Kenya," Food Policy, Elsevier, vol. 106(C).
    4. Mizanur Rahman & Takrima Sayeda, 2016. "The Effect of Integration with Global Apparel Value Chain," South Asia Economic Journal, Institute of Policy Studies of Sri Lanka, vol. 17(2), pages 248-270, September.
    5. Babur Wasim Arif, 2013. "Education, Experience and Enterprise Development," Journal of South Asian Development, , vol. 8(3), pages 273-299, December.
    6. Keijiro Otsuka, 2020. "Strategy for Cluster-Based Industrial Development in Developing Countries," Discussion Papers 2019, Graduate School of Economics, Kobe University.
    7. Ryszard Kata & Justyna Chmiel, 2020. "Financialisation Level of Non-Financial Enterprises in European Union Countries: A Comparative Analysis," European Research Studies Journal, European Research Studies Journal, vol. 0(3), pages 378-398.
    8. Alessandro Ferrari, 2022. "Inventories, Demand Shocks Propagation and Amplification in Supply Chains," Papers 2205.03862, arXiv.org, revised Oct 2024.
    9. Stewart, Robert & Chowdhury, Murshed & Arjoon, Vaalmikki, 2021. "Interdependencies between regulatory capital, credit extension and economic growth," Journal of Economics and Business, Elsevier, vol. 117(C).
    10. Carol Newman & John Page, 2017. "Industrial clusters: The case for Special Economic Zones in Africa," WIDER Working Paper Series 015, World Institute for Development Economic Research (UNU-WIDER).
    11. Camara Kwasi Obeng & Peter Yeltulme Mwinlaaru & Isaac Kwesi Ofori, 2022. "Global Value Chain Participation and Inclusive Growth in Sub-Saharan Africa," Springer Books, in: Evelyn F. Wamboye & Bichaka Fayissa (ed.), The Palgrave Handbook of Africa’s Economic Sectors, pages 815-840, Springer.
    12. Sana Ullah & Muhammad Tariq Majeed & Babur Wasim Arif, 2021. "Social capital and firms’ choice of financing under credit constraints: microeconomic evidence from Pakistan," DECISION: Official Journal of the Indian Institute of Management Calcutta, Springer;Indian Institute of Management Calcutta, vol. 48(1), pages 3-13, March.
    13. Anginer,Deniz & Demirguc-Kunt,Asli & Mare,Davide Salvatore, 2020. "Bank Capital and Risk in Europe and Central Asia Ten Years After the Crisis," Policy Research Working Paper Series 9138, The World Bank.
    14. Jessica M. K. Streit & Sarah A. Felknor & Nicole T. Edwards & John Howard, 2021. "Leveraging Strategic Foresight to Advance Worker Safety, Health, and Well-Being," IJERPH, MDPI, vol. 18(16), pages 1-19, August.
    15. Mano, Yukichi & Yamano, Takashi & Suzuki, Aya & Matsumoto, Tomoya, 2011. "Local and Personal Networks in Employment and the Development of Labor Markets: Evidence from the Cut Flower Industry in Ethiopia," World Development, Elsevier, vol. 39(10), pages 1760-1770.
    16. Tomoko Hashino & Keijiro Otsuka, 2011. "From Smithian Growth to Schumpeterian Development: An Inquiry into the Development of the Kiryu Weaving District in the Early 20th Century Japan," Discussion Papers 1121, Graduate School of Economics, Kobe University.
    17. Zhang, Xiaobo, 2022. "Cluster-based agricultural development: a comparison between China and Africa," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 26(1), August.
    18. Stefan Angrick, 2018. "Structural conditions for currency internationalization: international finance and the survival constraint," Review of International Political Economy, Taylor & Francis Journals, vol. 25(5), pages 699-725, September.
    19. Michler, Jeffrey D., 2020. "Agriculture in the process of development: A micro-perspective," World Development, Elsevier, vol. 129(C).
    20. Mano, Yukichi & Iddrisu, Alhassan & Yoshino, Yutaka & Sonobe, Tetsushi, 2012. "How Can Micro and Small Enterprises in Sub-Saharan Africa Become More Productive? The Impacts of Experimental Basic Managerial Training," World Development, Elsevier, vol. 40(3), pages 458-468.

    More about this item

    Keywords

    Human resource management; innovation; performance; SME; Vietnam;
    All these keywords.

    JEL classification:

    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:sae:jinter:v:34:y:2022:i:2:p:228-249. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: SAGE Publications (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.