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Abstract The objective of this paper is to test how human resources management (HRM) practices and employees' knowledge influence the development of innovative capabilities and, by extension, a firm's performance. Results confirm that HRM practices are not directly associated with innovation unless they take into account employees' knowledge. Specifically, our analyses establish a mediating role for the uniqueness of knowledge between collaborative HRM practices and innovative activity, a positive influence of knowledge‐based HRM practices on valuable knowledge, and a positive contribution of innovations to the company's profit. We tested hypotheses in a sample of firms from the most innovative Spanish industries through structural equation modeling. © 2009 Wiley Periodicals, Inc.
Cabrales et al. (Wed,) studied this question.