Corporate Sustainable Innovation and Employee Behavior

Abstract

Corporate sustainable innovation is a major driver of institutional change, and its success can be largely attributed to employees. While some scholars have described the importance of intrinsic motivations and flexibility to facilitate innovation, others have argued that constraints and extrinsic motivations stimulate innovation. In the context of sustainable innovation, we explore which employee work practices are more conducive to firm-level innovation in corporate sustainability. Our results, based on a sample of 4640 French employees from 1764 firms, confirm the positive impact of intrinsic motivations (through employee social interactions), and the negative impact of job strain (through high imposed work pace), on corporate sustainable innovation. We also find that extrinsic rewards, through pay satisfaction, counteract the negative effect of job strain to promote sustainable innovation. This indicates that intrinsic and extrinsic rewards can work in tandem to facilitate sustainable innovation.