Human Resource Management Practices and Corporate Entrepreneurship: Moderating Role of Firm’s Innovative Capacity

Corporate entrepreneurship becomes critical in building the firms’ innovative climate and maintaining sustainable competitive advantage. In recent years, little yet nascent literature has arisen that empirically analyses the relationship between human resource management practices and corporate entrepreneurship. Notwithstanding, many studies urge researchers to find ways to flourish the relationship between human resource management practices and corporate entrepreneurship. The present study fills a lacuna by investigating the moderating role of a firm’s innovative capacity in the relationship between human resource management practices and corporate entrepreneurship. Using a convenience sampling technique, data were marshalled through a self-reported questionnaire from 113 SMEs operating in the Northern region of Sri Lanka. The study revealed a significant positive relationship between human resource management practices and corporate entrepreneurship. Further, the study confirmed that the positive relationship is much stronger at a high level of a firm’s innovative capacity than at a lower level. The study contributes to the extant HRM literature in many ways discussed at the end of the paper. This study pushes back the frontiers by responding to the growing debate as to the critical role that HRM can play in enhancing corporate entrepreneurship through a firm’s innovative capacity.