Be nice to your innovators: Employee treatment and corporate innovation performance

Chen Chen, Yangyang Chen, Po Hsuan Hsu, Edward J. Podolski

Research output: Journal article publicationJournal articleAcademic researchpeer-review

65 Citations (Scopus)


This paper investigates the effect that employee treatment schemes have on corporate innovation performance. We find that firms with better employee treatment schemes produce more and better patents through improving employee satisfaction and teamwork. Additional tests suggest that our main findings cannot be attributed to job security, unionization, reverse causality, and omitted variables. We also find that firms with better employee treatment schemes produce patents that enhance market valuation and facilitate better future operating performance. Collectively, our findings show that treating employees well benefits firms and shareholders, for well treated employees are encouraged to create intellectual property.
Original languageEnglish
Pages (from-to)78-98
Number of pages21
JournalJournal of Corporate Finance
Publication statusPublished - 1 Aug 2016


  • Citations
  • Corporate innovation
  • Employee satisfaction
  • Innovative strategies
  • Patents

ASJC Scopus subject areas

  • Business and International Management
  • Finance
  • Economics and Econometrics
  • Strategy and Management

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