Year: 2004
Type: preprint
Abstract: A number of recent empirical studies of firm-level productivity (growth) have been concerned with establishing potential complementarity between multiple organizational design practices. These papers have drawn conclusions on basis of the effect of the interaction term between each possible pair of practices. In this paper we show that this approach may lead to misleading results in case more than two practices are considered. We develop a proper testing procedure for complementarity and substitutability in case there are multiple organizational practices that affect output. The testing methodology is illustrated by empirical examples of three and four innovation practices affecting productivity. The testing framework can easily be applied to test for supermodularity.
Authors: Boris Lokshin, Martin Carree, René Belderbos
Language: English
Subfield: Economics and Econometrics
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W3123110765