Challenging the knowledge resources complementarity hypothesis: a counterexample

Abstract

ABSTRACT Drawing on the resource-based view of the firm, and counter to the mainstream literature, we propose and empirically show that two knowledge resources can be substitutive (rather than complementary) for each other. Our test focuses on the interplay between managers’ and workers’ knowledge stock, considered as knowledge resources that firms can apply to improve innovation. We hypothesise a mutually exclusive effect of managerial experience (managers’ knowledge stock) and labour skills (workers’ knowledge stock) on product innovation. Drawing on the most recent waves of the World Bank Enterprise Survey (WBES), we construct a cross-sectional sample of 2,725 manufacturing firms. We used binary choice model to test the proposed effects. The results show negative interaction between labour skills and managers’ experience in determining the probability to achieve product innovation, putting the knowledge resource complementarity hypothesis into question, and opening an academic debate that will have implications for knowledge management practice.