Investigating firm-level effects of knowledge management strategies on innovation performance

This study contributes to the scarce stream of literature that concentrates on measuring the firm-level effects of knowledge management (KM) strategies on innovation performance. It evaluates the impact of codification and personalisation strategies, both individually and jointly, distinguishing between innovation propensity and innovation output. The research applies a knowledge production function (KPF) approach to the Community Innovation Survey (CIS) data for Luxembourg. Reliance on internationally agreed definitions and focus on an open international economy largely dominated by innovative service firms provide an original and significant contribution to the available empirical literature. Findings indicate that personalisation and codification effects on innovation propensity are highly comparable. In contrast, personalisation exerts a positive effect on innovation output, whereas codification does not. Results further advocate that codification affects output only when combined with personalisation. However, the adoption of mixed strategies does not seem to be more effective than a pure personalisation strategy.