Employee resistance against innovations

This paper shows that employee resistance against innovations can be explained by the sunk costs nature of human capital investments induced by innovations. Therefore, internal resistance against innovations is more likely if it is uncertain that the employees can reap the benefits of these investments. This is, for example, the case if employment in the firm is bound to decrease or if further innovations are planned. These theoretical predictions are confirmed empirically in a multi-variate analysis. A representative German firm data set for the service sector is used for the estimation.