Knowledge Management, Innovation, and Productivity: A Firm Level Exploration Based on French Manufacturing CIS3 Data

In modern knowledge driven economies, firms are increasingly aware that individual and collective knowledge is a major factor of economic performance. The larger the firms and the stronger their connection with technology intensive industries, the more are they likely to set up knowledge management (KM) policies, such as promoting a culture of information and knowledge sharing (C), motivating employees and executives to remain with the firm (R), forging alliances and partnerships for knowledge acquisition (A), implementing written knowledge management rules (W). The French 1998-2000 Community Innovation Survey (CIS3) has surveyed the use of these four knowledge management policies for a representative sample of manufacturing firms. The micro econometric analysis of the survey tends to confirm that knowledge management indeed contributes significantly to firm innovative performance and to its productivity. The impacts of adoption of the four surveyed KM practices on firm innovative and productivity performance are not completely accounted by firm size, industry, research & development (R&D) efforts or other factors, but persist to a sizeable extent after controlling for all these factors.