Productivity, innovation strategies and industrial relations in SMEs. Empirical evidence for a local production system in northern Italy

The paper aims to provide an original contribution to evaluating several kinds of relations between four areas of innovation activities – training, technology, organization, ICT (information and communication technologies) – and industrial relations and firm’s economic performance. Quantitative evidence for a SME‐based local production system is provided by exploiting two datasets: the first is derived from a direct survey carried out in 2005 collecting data on innovations, labour flexibility and industrial relations; the second is represented by a panel of official balance sheets data for the period 1998–2004. The analysis is divided in two consequential parts. We first examine the drivers of different innovation strategies and subsequently we exploit innovation indicators as potential drivers of firm’s productivity. The results show that training activities and organizational changes have strong links with many industrial relations indicators, thus emerging as industrial relations driven innovations. On...