Benefits offer no advantage on firm productivity? An empirical examination

Abstract

Purpose

To examine the moderating effect of employee benefits on the relationship between labor input and firm output.

Design/methodology/approach

Three high‐tech sectors, covering different time periods, are taken as the analytical samples. An extended Cobb‐Douglas production function is adopted to examine the research hypotheses.

Findings

Examinations reveal that employee benefits have a moderating effect on firm productivity, irrespective of industry or firm size. Furthermore, the effect size is greater in small to medium‐sized enterprises (SMEs) than in large firms.

Research limitations/implications

Using benefits to achieve competitive advantage for SMEs seems to be more important than for large firms. However, this examination concentrates on the electronics industry only.

Practical implications

Benefits can help a firm achieve competitive advantage through better quality of labor.

Originality/value

This study makes an interesting contribution to the understanding of the relationship between benefits and firm productivity.

Citation

Tsai, K. and Wang, J. (2005), "Benefits offer no advantage on firm productivity? An empirical examination", Personnel Review, Vol. 34 No. 4, pp. 393-405. https://doi.org/10.1108/00483480510599743