2019
DOI: 10.1111/jbfa.12393
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Employee treatment and firm innovation

Abstract: We identify firm innovation as a channel through which the treatment of employees affects firm value. Long-term incentive theory supports positive effects of 'good' employee treatment on innovation. Alternatively, entrenchment theory suggests such treatment will lead to complacency and shirking, hence deterring innovation.These opposing views merit investigation since human capital is increasingly essential to the growth and success of a firm. Using the KLD database and patent/citation data, we find a signific… Show more

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Cited by 83 publications
(45 citation statements)
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“…Thus, achieving innovation in products, processes, ideas, and services to achieve cost-efficacy and long-term success for an organization is more desirable than ever (Calantone et al , 2002). In recent years, with the advent of a resource-based view in business, it is argued that the human resources and intellectual capital (intangible asset) of a firm are important sources of innovativeness (Coff, 1997; Mao and Weathers, 2019; Ode and Ayavoo, 2020). It is proposed that to achieve innovative performance, firms are required to capitalize on the abilities, knowledge, opportunities and willingness of employees to innovate (Fu et al , 2015).…”
Section: Introductionmentioning
confidence: 99%
“…Thus, achieving innovation in products, processes, ideas, and services to achieve cost-efficacy and long-term success for an organization is more desirable than ever (Calantone et al , 2002). In recent years, with the advent of a resource-based view in business, it is argued that the human resources and intellectual capital (intangible asset) of a firm are important sources of innovativeness (Coff, 1997; Mao and Weathers, 2019; Ode and Ayavoo, 2020). It is proposed that to achieve innovative performance, firms are required to capitalize on the abilities, knowledge, opportunities and willingness of employees to innovate (Fu et al , 2015).…”
Section: Introductionmentioning
confidence: 99%
“…Additionally, socially responsible firms appeal to certain customers and have been found to be associated with superior sales and firm performance (Lev et al., ). Socially responsible firms can also attract and retain high‐quality employees, which contributes to firm value (Edmans, ; Mao & Weathers, ). Furthermore, commitment to social and environmental activities can decrease lawsuits and environmental costs (Dhaliwal et al., ) and increase investment efficiency and innovation (Cook et al., ).…”
Section: Introductionmentioning
confidence: 99%
“…The evidence offered by the literature in this context is very variegated (Perry et al 2009); only in some contexts, for example medical and education, is its effect positive (Andersen 2007;Davidson et al 1992;Dowling and Richardson 1997;Shaw et al 2003). It is worth noting that this is true in corporate contexts as well Mao and Weathers (2019).…”
Section: Literary Review and Research Hypothesismentioning
confidence: 92%