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Abstract

Recent literature suggests that labor related issues can impact corporate innovation. In this study we hypothesize and find that firms with congenial work environments innovate more and have greater innovative efficiency. Our results also suggest that cash profit sharing and employee involvement have a positive bearing whereas union relationships have a negative impact on innovation output of a firm. In addition, subsample analysis reveals that employee-friendly policies are more important in industries having higher employee power. Our results are consistent with the logic that happy and satisfied employees tend to be more productive than the unhappy and dissatisfied ones. Our work suggests a channel through which satisfied employees contribute towards increasing firm value − by increasing the innovation productivity and efficiency of the firm. So, firms must make continued efforts towards creating and maintaining a friendly work environment.

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... Abraham (2012) señala que los empleados con apego emocional y pasión por el trabajo son los más capaces para innovar. Como esta satisfacción es fundamental para la capacidad innovativa, las empresas crean mecanismos para la retener a los empleados (Adhikari, Choi, & Sah, 2017) y acumular conocimiento en el largo plazo, mediante el learning-by-doing. ...
... Estas dimensiones promueven las habilidades de innovación en el individuo y, en consecuencia, facilitan la creación de novedades para el mercado. Este resultado es consistente con otros estudios, por ejemplo, el nivel de estudios del trabajador (Fransen, 2013), las empresas con presencia femenina (Torchia et al., 2018), los propietarios de las empresas -y sus familias- (Minetti et al., 2015), y trabajadores satisfechos y su permanencia en la empresa (Adhikari et al., 2017) se relacionan positivamente con la capacidad innovativa. ...
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Una alternativa de las micro y pequeñas empresas (mypes) para competir es la innova-ción basada en las personas como componente clave. El presente documento mide las habilidades de innovación a través del Índice General de Habilidades de Innovación en el Individuo (ighii) con siete dimensiones básicas. Se contrasta el índice en una muestra de 1.010 mypes de la Zona Metropolitana del Valle de México. Se realiza un análisis factorial para establecer la estructura del indicador y, mediante una regresión logit, se estiman los determinantes de las habilidades de inno-vación. Con base en los resultados, se encuentra que educación, género, antigüedad en la empresa y puesto laboral del individuo, así como tamaño y años de operación de la empresa son factores positivos de estas habilidades. Una implicación para la política pública es el fomento de las mypes con individuos con estos atributos.
... Many previous studies have identified the importance of working conditions for enterprises' sustainable development. Delmas [27], Ahmed [28], Adhikari [29], Sharma [30], Chen [31], and Sauermann [32] agreed that applying new technology, approaching new production processes, or inventing new products are the root of sustainable development. Equality and recognition in the workplace motivate workers to participate more in organizational initiatives. ...
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... The transfer of technology has different forms: acquisition of patents or licenses (Jiang & Iii, 2010); mergers, acquisition or joint-ventures operations; acquisition of machines, equipment and components; reverse engineering; analysis of information contained in the catalogues of products, publications or presented at congresses, and hiring technicians from competing companies (Almario, 2018). The oncoming evolution of the intensive interaction between innovation transformation-such as technology transfer in the application of the ownership right transfer between the employer and employees (Aerts, Kraft, & Lang, 2015), that is, the innovation creators (Adhikari, Choi, & Sah, 2017)-and their practitioners requires monitoring of legislation that directs the productivity and potential economic consumption (Irani, 2010). Internationalization (Archibugi & Michie, 1995) of the whole system starts showing an upward trend in obtaining the right to apply economic value on a global scale (Molero & Garcia, 2008). ...
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... Companies with better worker treatment regarding safety, employee relations, and diversity produce more relevant patents, even better than those with lots of expertise. The study of employee friendliness and innovation by Adhikari et al. also suggested that cash profits and employee involvement have a positive impact on the innovation output of a firm [28]. In aligning with the fact that the more satisfied employees the better the productivity of a firm, the results of this study stress that employee-friendly policies elevate employee power in increasing the innovation productivity. ...
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As the fourth industrial revolution has been emerging, there are concerns of labor forces being replaced by technology, recent interest on the work-life balance, and the quality of employment has received attention. This study investigates the role of technology startups on employment and innovative performance. Using empirical data from workplace panel data provided by the Korea Labor Institute, this study reveals that technology startups impact the employment quality and innovative performance by the action of technological innovation. The results highlight the quality of employment as a driver for innovative performance in technology startups. The results of this study will provide practical implications for enhancing technology entrepreneurship.
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... Employee treatment is directly related to firm performance (Edmans, 2011;Faleye and Trahan, 2011), including capital structure decisions (Bae et al., 2011;Verwijmeren and Derwall, 2010) or acquisition performance (Ertugrul, 2013). Better working environments yield higher corporate innovation (Mao and Weathers, 2015;Adhikari et al., 2016;Chen et al., 2016) and innovation is also higher for a firm which promotes workplace diversity (Mayer et al., 2016;Gao and Zhang, 2016). ...
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I evaluate the effect of loyalty on individuals' portfolio choice using a unique dataset of retirement contributions. I exploit the statutory difference that, in 401(k) plans, stand-alone employees can invest directly in their division, while conglomerate employees must invest in the entire firm, including all unrelated divisions. Consistent with loyalty, employees of stand-alone firms invest 10 percentage points (75%) more in company stock than conglomerate employees. Support is also found using variation in loyalty between different groups of employees, across and within firms. The cost to employees of loyalty is large, amounting to nearly a 20% loss in retirement income.
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We review 74 experiments with no, low, or high performance-based financial incentives. The modal result is no effect on mean performance (though variance is usually reduced by higher payment). Higher incentive does improve performance often, typically judgment tasks that are responsive so better effort. Incentives also reduce "presentation" effects (e.g., generosity and risk-seeking). Incentive effects are comparable to effects of other variables, particularly "cognitive capital" and task "production" demands, and interact with those variables, so a narrow-minded focus on incentives alone is misguided. We also note that no replicated study has made rationality violations disappear purely by raising incentives. Copyright 1999 by Kluwer Academic Publishers
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According to the advocates of a "Generalized Darwinism" (GD), the three core Darwinian principles of variation, selection and retention (or inheritance) can be used as a general framework for the development of theories explaining evolutionary processes in the socio­economic domain. Even though these are originally biological terms, GD argues that they can be re-defined in such a way as to abstract from biological particulars. We argue that this approach does not only risk to misguide positive theory development, but that it may also impede the construction of a coherent evolutionary approach to "policy implications". This is shown with respect to the positive, instrumental and normative theories such an approach is supposed to be based upon.
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The authors present a model suggesting that innovative output is influenced by R&D and market struc ture characteristics. Using a new and direct measure of innovation in a cross-section regression model estimating the total number of inno vations and large- and small-firm innovations, they find that: (1) th e total number of innovations is negatively related to concentration and unionization, and positively related to R&D, skilled labor, and t he degree to which large firms comprise the industry; and (2) these d eterminants have disparate effects on large and small firms. Copyright 1988 by American Economic Association.
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We study a two-person zero-sum game where players simultaneously choose sequences of actions, and the overall payoff is the average of a one-shot payoff over the joint sequence. We consider the maxmin value of the game played in pure strategies by boundedly rational players and model bounded rationality by introducing complexity limitations. First we define the complexity of a sequence by its smallest period (a nonperiodic sequence being of infinite complexity) and study the maxmin of the game where player 1 is restricted to strategies with complexity at most n and player 2 is restricted to strategies with complexity at most m. We study the asymptotics of this value and a complete characterization in the matching pennies case. We extend the analysis of matching pennies to strategies with bounded recall.
The causal effect of labor unions on innovation
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Bradley, D. J., Kim, I., & Tian, X. (2016). The causal effect of labor unions on innovation. Management Science, forthcoming.
Happiness and productivity Discussion paper 4645
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Oswald, A. J., Proto, E., & Sgroi, D. (2009). Happiness and productivity Discussion paper 4645. Bonn, Germany: Institute for the Study of Labor (IZA).
The financing of R&D and innovation. Handbook of the Economics of Innovation
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Hall, B. H., & Lerner, J. (2010). The financing of R&D and innovation. Handbook of the Economics of Innovation, 1, 609-639.