The effect of workers’ ethical attributes on firms’ productivity : Empirical evidence from Azad Jammu and Kashmir’s (Pakistan) handicrafts industries

Purpose – The purpose of this study is to determine whether the ethical attributes of workers or firms affect firms’ productivity or not. There is growing literature that establishes the fact that human capital attributes such as education, skill and experience matter for productivity growth. Design/methodology/approach – The authors develop a simple theoretical model where we incorporate the ethical attributes of workers. To support our hypothesis, the authors test that model empirically by using the data of 83 handicrafts firms from Azad Jammu and Kashmir, Pakistan. Findings – The empirical findings of this study substantiate the hypothesis that besides the traditional factors, the workers’ or the firms’ ethical attributes also increase firms’ productivity. Originality/value – The study is based on cross-sectional data and is entirely original in its purpose.