Experience, innovation and Productivity. Empirical evidence from Italy's slowdown

The authors investigate whether the level of employee experience is\r\ngood or bad for innovation and productivity. Using a sample of\r\nItalian manufacturing firms during the early 2000s, the authors find\r\ndifferent results for managers’ versus workers’ experience. The\r\neffect of managerial experience—proxied by age—on firm\r\nperformance appears to depend on the type of firm; in innovative\r\nfirms, having older managers and board members has a negative\r\neffect on innovation and productivity, while in non-innovative firms,\r\nthe costs and benefits of having older managers appear to cancel\r\neach other out. For workers, the effect of having a high share of\r\ninexperienced (temporary) workers is unambiguously associated\r\nwith low innovation and low productivity. These results also hold\r\nwhen endogenous regime switching is taken into consideration.