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.