The impact of organisational and technical innovations on productivity: the case of Korean firms and sectors

The aim of this study is to provide both qualitative and rigorous empirical evidence regarding the positive and contemporaneous impact of organisational and technical innovations on productivity in Korean firms and sectors. Econometric methods (fixed effects and generalised method of moments) are used to measure the relationship between the just-in-time process (mostly an organisational type of process), technology (R&D) and productivity. In these regressions we also include the control variables of wage gap incentive, capital-to-labour ratio, and education expenses for sales training to accommodate for other important influences. From the overall and quantitative analyses, we provide evidence to the hypothesis that both organisation and technology greatly improve productivity of Korean manufacturing firms and sectors. In addition, not all firms and industrial sectors are influenced in the same way by all these factors. This variety of organisational and technological 'behaviour' is clearly indicated in our empirical findings. The contemporaneous impact of both organisational and technical innovations has not been tested before.