How do human resource management practices affect innovation of small- and medium-sized enterprises in a transition economy?

Vu Hoang Nam, Hiep Ngoc Luu

    Research output: Contribution to journalArticlepeer-review

    Abstract

    Small- and medium-sized enterprises (SMEs) are one of the engines for inclusive economic growth. Yet little is known about the contribution of human resource management (HRM) practices to the success of SMEs. This study empirically examines how HRM practices determine different categories of innovation of SMEs in the context of a transition economy. Using a longitudinal dataset and applying the instrumental variable methodology to correct for endogeneity problems, our study uncovers that HRM practices positively affect the quality of employed human and physical capital assets of SMEs. More importantly, we find that that HRM practices significantly contribute to the launch of new products and improvement of existing products. In addition, we also find that the adoption of HRM practices facilitate labour productivity and value added. Taken together, these findings highlight that HRM practices are a strategic resource for innovation and development of SMEs in transition economies by rewarding them with higher-quality capital assets.
    Original languageEnglish
    Number of pages22
    JournalJournal of Interdisciplinary Economics
    VolumeOnlineFirst
    Early online date3 Aug 2021
    DOIs
    Publication statusE-pub ahead of print - 3 Aug 2021

    Keywords

    • Human resource management
    • Innovation
    • Performance
    • SME
    • Vietnam

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