ICT, INNOVATION, WAGES AND LABOUR PRODUCTIVITY. NEW EVIDENCE FROM SMALL LOCAL FIRMS

This article analyses new co-innovative sources (ICTs, human capital and training, and new forms of work organisation) of labour productivity in small firms producing for local markets. Using 2009 survey data for a representative sample of 464 firms based in Girona (a province in the north-east of Spain) and using Ordinary Least Square (OLS) econometric estimation techniques, two main findings have emerged from the study. First, that mean wage is the main determinant of labour productivity. And second, unlike the evidence available for larger firms, co-innovation does not have a total effect on explaining small local firm's labour productivity. Causal relationships between co-innovation and labour productivity have only been identified in the innovative small local firms, one quarter of the sample.