Labour productivity and firm performance: evidence from certified firms from the EFQM excellence model

Abstract

Labour productivity is an ongoing topic in literature, specifically in developed economies where labour costs are higher. The main aim of this study is to examine the effects of labour productivity on firm performance. Using a sample of 311 Czech firms, including 18 certified firms from the European Foundation for Quality Management (EFQM) Excellence Model, the two-step system generalised method of moments (GMM) is performed to test the hypotheses. The current study results revealed that the quality certificates have a positive impact on the firm performance. The relationship between labour productivity and firm performance of certified firms is negative. However, the labour productivity of non-certified firms has a positive impact on the firm's performance. The present study's findings offer deeper insight into how labour productivity of the certified and non-certified firms relates to firm performance.