Mar 20 2019

The relationship between productivity, size and innovation

A recent publication sheds light on the relationship between a firm’s productivity, size and objectives for innovations. Whether ‘it pays to be green’ or not, seems to depend on firm size.

NIFU researcher Pål Børing examines how a firm’s productivity level is related to its potential corporate social responsibility (CSR) objectives for innovations, and whether this relationship is affected by firm size. By looking at these factors, Børing offers a resource argument in order to explain the different results between small and large firms.

The article, published in Eurasian Business Review, focuses on two CSR objectives: a firm’s objective of reducing environmental impacts, and an objective of improving health or safety of the employees. Based on a data set comprising Norwegian manufacturing firms, the estimation results show that the predicted probability of adopting the objective of reducing environmental impacts has a significant negative effect on the productivity level among large firms. This effect is not significant among small firms. The predicted probability of adopting the objective of improving health or safety of the employees has no significant effect on the productivity level of small or large firms. These results indicate that whether ‘it pays to be green’ or not, depends on firm size.

The article is available here: The relationship between firm productivity, firm size and CSR objectives for innovations.

For more information, contact:
Pål Børing, Senior Researcher, Studies in Statistics and Indicators
paal.boring@nifu.no
(+47) 413 05 854