Human capital and innovation in Sub-Saharan countries: a firm-level study

Abstract

This paper contributes to the scarce literature on the relationship between human capital and innovation at the firm-level. In this paper we examine whether human capital endowments, such as the general level of schooling within a firm, and practices of firms, such as formal training and employee slack time, have a positive relationship with the innovative output of firms. We contribute by using a more sophisticated approach and analyse how different combinations of human capital elements affect innovation. We study this relationship in Sub-Saharan countries where the general level of human capital is lower compared with developed countries. The results illustrate that internal mechanisms that spur human capital are of particular importance for innovative output in this context. In addition, our results indicate that specific combinations of human capital elements can even have negative effects. In particular, for firms in the manufacturing sector that offer employee slack, the effect of employee schooling actually turns negative, while the combination of training and slack time does not have a significant effect.

Innovations, ICT and ICT‐driven labour productivity in Poland

“…Moreover, the estimated marginal effects for ICT_SKILLS show that the probability of introducing process and organizational innovations and marketing innovations are larger by 0.05 and 0.09, respectively, for firms in which all recruited employees were required to have ICT skills, compared to firms with less skilled candidates. These results are in line with the empirical literature, which points to human capital as one of the principal factors of innovation capacity (Smith et al, 2011;Van Uden et al, 2017). Enterprises which introduced motivational pay systems were characterized by a higher probability of introducing product, process and organizational, and marketing innovations by 0.06, 0.06 and 0.03, respectively, compared to other firms.…”

“…At the same time, it appeared ICT complementarities influence particular types of innovation in an uneven way. These results are in line with the empirical literature, which points to human capital as one of the principal factors of innovation capacity (Smith et al, 2011;Van Uden et al, 2017). 25 After testing the validity of assumptions concerning the error term, it turned out that it was homoscedastic and followed normal distribution for the Tobit model and multivariate normal distribution for multivariate probit model.…”

EMPLOYEES’ HETEROGENEOUS QUALIFICATIONS, INTERNAL R&D, FORMAL TRAINING AND INNOVATION PERFORMANCE

“…Scholarly studies have also used different elements of the workforce knowledge diversity to measure firm-level innovation performance. Indeed, the effect of employees' qualification focusing on one degree such as high school certificate (see, Barasa et al, 2017;van Uden et al, 2017;Abdu and Jibir, 2018) has much been documented compared with the workforce diverse qualifications. According to Nelson and Phelps (1996), a higher level of an educated workforce in a firm stimulates the capacity to comprehend, create and process information swiftly compared to those without education.…”

“…A few studies use a percentage of the workforce with high school qualification to measure human capital about innovation performance (e.g., Barasa et al, 2017;van Uden et al, 2017;Abdu and Jibir, 2018), while others use a percentage of the workforce with a college degree (Roy et al, 2015;Cantner et al, 2014). However, the extant literature on the relationship between higher qualifications (with a focus on different degrees) and innovation performance is scarce.…”

“…However, the extant literature on the relationship between higher qualifications (with a focus on different degrees) and innovation performance is scarce. See, for example, Pfeiffer 1997;Oyelaran-Oyeyinka and Barclay 2004;Vinding 2007;Cabello-Medina et al 2011;Acemoglu et al 2014;Roy 2015;Oluwatobi et al 2016;van Uden et al 2017;Barasa et al 2017. However, Castro et al (2012…”