From Training to Innovation: The Mediating Role of Learning-Oriented Management Practices in Firms

Abstract

Corporate innovation performance is often seen as a black box, influenced by various determinants. These include both external factors, such as technological input, and internal factors, such as organizational capabilities. This paper draws on human capital theory and the resource-based view suggesting that employee training and knowledge development constitute valuable internal resources. This topic is particularly important in Central and Eastern Europe, where firms operate in an environment shaped by a strong industrial tradition and integration into European value chains. At the same time, such territory continues to display persistent features of catching-up innovation systems, with limited absorptive capacity, shortages of skilled labor, and the uneven diffusion of advanced managerial practices. Although the importance of employee training and knowledge development for innovation is widely acknowledged, existing research does not sufficiently explain whether training alone is enough to enhance innovation performance or whether its effect depends on learning-oriented management practices. This article addresses this gap by examining the mediating role of these practices in the relationship between training and knowledge development and firms’ innovation performance. By employing firm-level data obtained from the World Bank Group Enterprise Surveys (WBES) 2024 and the Partial Least Squares Structural Equation Modeling (PLS-SEM) method, we show that training and knowledge development positively affect innovation performance. Moreover, we show that this relationship is partially mediated by learning-oriented management practices. Such findings offer several new insights from which initial implications for practitioners and policymakers can be derived, particularly within Central and Eastern Europe. From a policy perspective, the findings support the importance of such instruments that will be aimed not only at human capital development, but also at the diffusion of managerial capabilities fostering organizational learning. From a managerial perspective, the study shows that investments in training are more significant when linked to systematic performance management and a culture of continuous improvement.