Abstract
This paper explores complementarities between human capital management strategies and Research and Development (R&D) strategies in high-technology firms. Using data on a large sample of electronics firms in seven states from an employer–employee matched dataset, we examine the relationship between firm-level R&D and firms’ human capital strategies. Our results indicate that firms with high R&D investment are more likely to implement externally focused human capital strategies, while firms with low R&D investment are more likely to implement internally focused human capital strategies. Further, firms that adopt both high R&D investment and an externally focused human capital management strategy show higher productivity than comparable firms that implement an internally focused strategy. Our findings provide evidence of complementarities between firm R&D and the absorption of knowledge embedded in externally sourced individual human capital.
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