Frank Crowley

THE ROLE OF HRM AND ICT COMPLEMENTARITIES IN FIRM INNOVATION: EVIDENCE FROM TRANSITION ECONOMIES

Innovation is of critical importance for business productivity and economic growth. Firm characteristics and economic geography have been identified as influential drivers of innovation output. More recently, scholars have investigated the influence of Human Resource Management (HRM) practices and Information and Communication Technologies (ICTs) on firm performance. There is evidence that productivity gains from adapting HRM practices are higher if supported by investments in ICT. Therefore, we hypothesise that ICT-use and HRM practices are complementary inputs with respect to firm innovation. Our data source is the Management, Organisation, and Innovation (MOI) Survey which assesses management practices in manufacturing establishments in transition economies. We find that firms that employ HRM practices are more likely to innovate relative to firms that do not use HRM practices. Our analysis also reveals a complementary relationship between ICT-use and HRM practices which positively influences firm innovation performance.

Irish National Lottery Sports Capital Grant Allocations, 1999-2007: Natural Experiments on Political Influence

Irish National Lottery Sports Capital Grant Allocations show a clear bias towards the geographical areas represented by the Minister for Arts, Sports and Tourism and the Minister for Finance. This bias is the result of the procedures by which the funds are allocated.

THE INFLUENCE OF HUMAN RESOURCE MANAGEMENT SYSTEMS ON INNOVATION: EVIDENCE FROM IRISH MANUFACTURING AND SERVICE FIRMS

The ability of firms to maximise their innovative potential is fundamental to economic growth. The successful implementation of human resource management (HRM) practices is important for firm performance, and there is a growing understanding of the benefits to firms when HRM practices are applied together. We investigate if HRM practices are significantly more effective when implemented as ‘bundles’ or ‘systems’ of complementarities than when they are implemented individually in Irish manufacturing and service firms. The National Workplace Survey (2009a), a dataset rich with information on HRM practices at the firm level, is employed. HRM bundles relating to performance management and appraisal, knowledge sharing and involvement and empowerment in decision-making are all positively associated with innovation in manufacturing and service firms, and bundles of flexible employment contracts practices positively influence innovation in service firms. In summary, HRM practices when applied together, rather than in isolation, are important for firm innovation.

Product and service innovation and discontinuation in manufacturing and service firms in Europe

Purpose The purpose of this paper is to explore product/service innovation and discontinuation using the firm as a unit of analysis. A key objective of the paper is to compare the results between manufacturing and service firms. Design/methodology/approach A two-step production function approach is employed to examine first, a firm’s decision to innovate and second, a firm’s decision to discontinue products/services. Findings The results indicate that the factors affecting product innovation and discontinuation are similar for manufacturing and service firms, where innovation was significant for product/service discontinuation and process innovation was found to be important for innovations. Similarly, monopoly power was important for innovation in both industry types. However, there were also some underlying differences, particularly in relation to firm age and economic geography effects. Practical implications The conclusion of the paper is that it is not appropriate to assume that the process of product innovation and discontinuation will be identical across industry types. Originality/value This study is the first study in the literature that examines product/service discontinuation at the firm level and the relationship between innovation and product/service discontinuation using the firm as a unit of analysis. This study further adds to the under-researched (relative to manufacturing studies) area of service innovation.

Does more competition increase business-level innovation? Evidence from domestically focused firms in emerging economies

ABSTRACT This paper explores the relationship between the level of competition and innovation output for domestically focused businesses in emerging economies in Central and Eastern Europe and Central Asia. It uses survey data from 5054 businesses from the fifth Business Environment and Enterprise Performance Survey. A multivariate probit estimation of the likelihood of different innovation types finds that higher levels of competition are associated with greater likelihood of innovation, but this rises at a decreasing rate as competitor numbers grow. Also, firms operating in economies where competition policy is more effectively enforced are more likely to innovate. However, there is a point where ‘too much’ competition leads to less innovation – suggesting a tipping point effect. This suggests that policies to maximise competition, as measured by number of competitors, may not be optimal for promoting innovation in emerging economies. This requires a need for more nuanced competition policy approaches. The paper also finds that businesses relying on local markets are significantly less likely to introduce innovations than businesses trading domestically outside their local area, but increased competition in local markets increases the likelihood of businesses introducing product innovation. This points to a local rivalry effect.

Firm innovation and productivity in Europe: evidence from innovation-driven and transition-driven economies

ABSTRACT This article examines the links between firm innovation and firm productivity performance across a range of European economies, and in particular, we explore the differences between countries which are in transition from efficiency-driven to innovation-driven with those which are primarily innovation-driven economies. We employ an endogenous-switching technique to explore micro-economic survey-based data from both innovating and noninnovating firms. The model allows us to construct counterfactual scenarios which overcome problems of self-selection in the data. Some of the findings provide support for the traditional patterns previously found in the innovation literature, in which innovation efforts and investments in physical and human capital are found to be important for product and process innovations in manufacturing and service firms and across economy types. Our counterfactual analysis also allows us to outline a rationale for policy intervention towards noninnovating firms as well as innovating firms depending on where the transitional heterogeneity effects are greatest.

THE INFLUENCE OF THE MANAGER ON FIRM INNOVATION IN EMERGING ECONOMIES

The focus of this paper is on the relatively under-researched area of the influence of management on innovation activities for firms in emerging economies. Many emerging economies adopt a strategy of outward-oriented development with the aim to enhance innovation performance through Foreign Direct Investment (FDI) and international trade. However, attention should be paid to firm mechanisms, including intangibles, that may enable a firm to benefit from the more tangible performance-enhancing effects. It is through such a lens that we examine firm innovation in emerging economies, focusing on how variations in management experience, management practices and management incentives impact innovation performance. We employ a production function approach to identify the effect of the management environment on innovation diversity for firms in emerging economies. Our diversity of innovation measure takes account of five types of innovation activity, and is indicative of the degree of ‘innovativeness’ that the firm possesses. A Tobit estimation technique is employed. Innovation decisions typically involve managers as filtering mechanisms to consider a range of external and internal factors that enhance the likelihood of innovation outcomes. Our results indicate that management experience, management practices and management incentives are all important in determining innovation activities in firms from emerging economies. Our analysis reveals the importance of the management environment in explaining innovation differences at the level of the firm in emerging economies. Therefore, strategies to empower and support managers in emerging economies should be considered alongside outward-orientated development strategies.

Firm subsidies in Central and Eastern Europe and Central Asia: is there urban bias?

Abstract Regional disparities exist due to the uneven impact of economic development. The World Bank’s World Development Report (2009) advocates that attempts to spread out economic activity will undermine growth. This study finds that policy-makers in Central and Eastern Europe and Central Asia favour subsidizing firms in less urbanized locations. However, innovation market outcomes would probably be higher if there was an urban bias in subsidy distribution.