Exploring Complementary Effect of Innovation Strategies on Firm’s Employment Growth

Abstract

Purpose–Innovation plays an important role in the growth of a firm. It helps the firm to gain a competitive advantage domestic market as well as in the international market. Previous studies examined the outcome of various types of innovation strategies adopted by the firm on the employment of firms. Nevertheless, the role of all four types of innovation strategies, i.e., product, process, organizational, and marketing innovation may have complementary effects on the employment of firms. 

Design/methodology/approach–This study analyzed the role of quadruple-complementarity among various innovation strategies in stimulating the employment of firms using the data from World Bank Innovation surveys and World Bank Enterprise surveys. In this study, Pakistan, Bangladesh, and India were included in the analysis. Logistic regression is used as an econometric technique to carry out estimation.

Findings–The finding revealed the existence of quadruple complementarity among various innovative strategies adopted by the firm in an innovation-employment relationship only in Bangladesh, The results suggest that the firm may have better employment growth by simultaneously adopting all innovation strategies compared to the adoption of either strategy.

Originality/value–Innovation plays important role in improving firms’ growth. The paper addressed the role of multiple innovation strategies in enhancing firms’ growth in terms of the employment potential of the firm.

Implications and Research limitation–The findings suggest that government may design policies to improve the innovation potential of firms. Along with this firms may be encouraged to implement both technological and non-technological innovation strategies simultaneously for generating more employment opportunities.  Our study used cross-sectional data for analysis, however, the analysis may be conducted using panel data for obtaining more detailed results.