FINANCE


Te role of human capital: Evidence from corporate innovation Journal of Empirical Finance, 74, December 2023


YIFEI MAO ASSISTANT PROFESSOR


Cornell Peter and Stephanie Nolan School of Hotel Administration


Cornell SC Johnson College of Business Cornell University


LINK TO PAPER LINK TO VIDEO


Co-authors • Yifei Mao, Assistant Professor, Cornell Peter and Stephanie Nolan School of Hotel


Administration, Cornell SC Johnson College of Business, Cornell University


• Tong Liu, Massachusetts Institute of Technology • Xuan Tian, Tsinghua University, China


Summary It’s well understood that a firm consists of organizational capital and human


capital, but the roles played by each in explaining a firm’s long-term success are still unclear to researchers. Is a firm’s growth engine embedded in its hu- man capital? How important is a firm’s organizational capital in determining its growth strategy and performance? Tis paper examines the distinct roles played by inventors and firms in contributing to corporate innovation, consid- ering longstanding perspectives from scholarly literature and shedding new light on understandings of long-run firm growth.


Te authors investigate two dimensions of a firm’s innovation output: inno- vation performance as measured by both the quantity (patents) and quality (citations) of the firm’s innovation output. Tey find that inventors are six to eight times as important as firms in contributing to innovation performance as measured by patent and citation counts, but their importance is about the same in innovation strategies as captured by patent exploratory and exploit- ative scores. Furthermore, when labor mobility is reduced, the relative impor- tance of firms to inventors in contributing to innovation strategy increases.


TO IMPACT CONTENTS


RESEARCH WITH IMPACT: CORNELL SC JOHNSON COLLEGE OF BUSINESS • 2023 EDITION


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