That is what friends do

employee friendliness and innovation

Hari Adhikari, Won Seok Choi, Nilesh Sah

Research output: Contribution to journalArticleResearchpeer-review

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.

Original languageEnglish
Pages (from-to)65-76
Number of pages12
JournalJournal of Economics and Business
Volume90
DOIs
StatePublished - 1 Mar 2017

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Innovation
Employees
Work environment
Industry
Logic
Firm value
Employee involvement
Labor
Productivity
Profit sharing
Corporate innovation
Cash

Keywords

  • Corporate environment
  • Employee friendliness
  • Innovation
  • Labor productivity

Cite this

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That is what friends do : employee friendliness and innovation. / Adhikari, Hari; Choi, Won Seok; Sah, Nilesh.

In: Journal of Economics and Business, Vol. 90, 01.03.2017, p. 65-76.

Research output: Contribution to journalArticleResearchpeer-review

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