Paper short abstract:

We investigate how creativity correlates to employment growth, and how the paired input-variables either complement or substitute each other to impact employment growth at firm-level. We use robust OLS, Tobit, and Heckman two-stage models for the analysis.

Paper long abstract:

The serendipity of innovation makes employees' creativity vital for overall firm performance. While empirical studies linking innovation to creativity and employment are well-documented, to our knowledge, there are no studies relating to employment and creativity via innovative firms. This study, therefore, examines the collective impact of creativity and innovation on firm-level employment growth in Sub-Saharan Africa. Using well-documented enterprise and innovation-follow-up surveys from the World Bank Enterprise Survey for 11 selected countries and employing Heckman's two-stage model, our results offer strong evidence of the positive link between creativity on firm-level employment growth. Similarly, we find positive impact of product innovations on employment, but no effect from process innovations. Also, we find evidence for a complementary effect arising from combination of creativity with managerial experience and internal R&D. In contrast, combining creativity, the employees' level of education and skills results in a substitution effect. Our results have important managerial implications on the role of employees' creativity in supporting a compelling combination of innovation inputs.