Innovation, Productivity, and Training
37 Pages Posted: 4 Oct 2014
The firm's stock of human capital is an important determinant of its ability to innovate. As such, any increase in this stock through firm-sponsored training might lead to more innovation. We test this hypothesis using detailed data on firms' human capital investments and innovation performance, the Canadian longitudinal linked employer-employee data from 1999-2006. Our results, with workplace fixed-effects and allowing for time-varying productivity shocks, demonstrate that more training leads to more product and process innovation, with on-the-job training playing a role that is as important as classroom training. We then demonstrate that on-the-job training has a positive impact on firm-level productivity through improved process innovation.
Keywords: innovation, firm-sponsored training, productivity, linked employer-employee data
JEL Classification: J24, L22, M53, O32
Suggested Citation: Suggested Citation