Absorptive capacity and innovative performance: A human capital approach

TLDR

The study examines how human capital influences firms’ absorptive capacity and their innovative performance. The ordered probit analysis of 1,544 Danish firms shows that higher education levels, proactive HRM practices, and stronger ties to vertical partners and knowledge institutions boost innovation capacity while reducing imitation, whereas managerial work experience in science‑based and ICT‑intensive firms hampers innovation, underscoring the need for skill updating. Keywords include cooperation, education, HRM practices, work experience, and innovative performance; the authors acknowledge reviewers and contributors, with contact information provided for Anker Lund Vinding.

Abstract

Abstract This study investigates the importance of human capital on the firms' absorptive capacity, in relation to firms' innovative performance. The estimation of an ordered probit model including 1544 firms from the manufacturing and service industry in Denmark shows that the share of highly educated employees, application of human resource management practices within the firm and development of a closer relationship with both vertically related actors and knowledge institutions are not only positively correlated with the ability to innovate but also negatively correlated with the degree of innovative imitation. Finally, work experience among managers, heads of departments and employees at the managerial level is negatively associated with the ability to innovate for science-based and ICT-intensive firms, thus indicating the importance of updating the skills of the employees in these high-tech sectors. Keywords: CooperationEducationHuman resource management practicesWork experienceInnovative performance Acknowledgements This paper benefited from the comments of two anonymous referees and special thanks go to Bronwyn Hall and Jacques Mairesse for their inspiring comments. Additional informationNotes on contributorsAnker Lund VindingTel.: [phone]; Fax: [phone]; E-mail: [e-mail]