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Innovation capabilities and firm labor productivity

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  • Carine Peeters
  • Bruno Van Pottelsberghe

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.

Suggested Citation

  • Carine Peeters & Bruno Van Pottelsberghe, 2004. "Innovation capabilities and firm labor productivity," Working Papers CEB 04-030.RS, ULB -- Universite Libre de Bruxelles.
    • Handle: RePEc:sol:wpaper:04-030
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    References listed on IDEAS

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    Cited by:

    1. Salih Ye?il & Ahmet Kaya, 2015. "Exploring the link between innovation capability and financial performance," Proceedings of Business and Management Conferences 2303841, International Institute of Social and Economic Sciences.
    2. Salih Yesil & Zumrut Hatice Sekkeli & Ozkan Dogan, 2012. "An Investigation into the Implications of Islamic Work Ethic (IWE) in the Workplace," Journal of Economics and Behavioral Studies, AMH International, vol. 4(11), pages 612-624.

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    More about this item

    Keywords

    Innovation; organizational capabilities; performance; labor productivity.;
    All these keywords.

    JEL classification:

    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - 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; Personnel Economics - - Business Economics - - - Business Economics

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