title: Do organizations spend wisely on employees? Effects of training and development investments on learning and innovation in organizations.
abstract: The present study examines the effects of training and development on organizational innovation. We specifically suggest that the training and development investments of an organization affect its innovative performance by promoting various learning practices. We empirically tested our hypothesis by using time-lagged, multi-source data collected from 260 Korean companies that represent diverse industries. Our analysis showed that corporate expenditure for internal training predicts interpersonal and organizational learning practices, which, in turn, increase innovative performance. The data also revealed that the positive relationship between interpersonal and organizational learning practices and innovative performance is stronger within organizations that have stronger innovative climates. By contrast, investment in employee development through financial support for education outside an organization poses a significant negative effect on its innovative performance and no significant effect on learning practices. The present study provides a plausible explanation for a mechanism through which the investment of an organization in employees enhances its innovative performance. Copyright © 2013 The Authors.
authors.affiliation: School of Business, Nanjing University Nanjing, China.
authors.forename: Sun Young
authors.initials: SY
authors.lastname: Sung
authors.affiliation: College of Business Administration, Seoul National University Seoul, Korea.
authors.forename: Jin Nam
authors.initials: JN
authors.lastname: Choi
keywords: innovative climate; innovative performance; learning practices; training and development investments