Emiratization and Workforce Innovation in Banking Sector

This study examines the impact of nationalization in employment towards bank innovation and individual innovative behavior. Using sample from United Arab Emirates, this paper studies the impact of Emiratization on innovation motivation of Emirati employees and compare the innovation degree between Emirati employees and expats. We conduct the investigations from two aspects. First, we survey the innovative behavior at the individual level through sets of questionnaires conducted on selected company managers. The questionnaires are projected to access the interviewees’ opinions about the idea generation, idea promotion, and idea implementation among their subordinates. Second, using sample of 13 commercial banks in the UAE, we construct firm-level innovation index on firm samples. The innovation index is proxied by the technology gap ratio which is estimated using stochastic frontier analysis. Our findings indicate a positive effect of Emiratization on firm innovation. From the individual perspective, a work team with more national employees tends to have positive impact on idea generation and idea implementation but have negative impact on idea promotion.