How Do Human Resource Management Practices Affect Innovation of Small- and Medium-sized Enterprises in a Transition Economy?

Small- and medium-sized enterprises (SMEs) are one of the engines for inclusive economic growth. Yet little is known about contribution human resource management (HRM) practices to success SMEs. This study empirically examines how HRM determine different categories innovation SMEs in context a transition economy. Using longitudinal dataset applying instrumental variable methodology correct endogeneity problems, our uncovers that positively affect quality employed physical capital assets More importantly, we find significantly contribute launch new products improvement existing products. In addition, also adoption facilitate labour productivity value added. Taken together, these findings highlight strategic development economies by rewarding them with higher-quality assets. JEL: L25, O15, O31