Corporate budget governance through workforce engagement: As an antecedent to innovation

Abstract

While the notion that firms pursue innovation is not controversial, it is one of the most complex processes employed by organizations and results vary greatly across companies. This paper investigates the link between budgetary participation intensity and innovation, using communication, job satisfaction and decentralization as mediators to such relationships. Our findings in a developing country setting indicate that budgetary participation intensity is antecedent to communication, job satisfaction and decentralization which in turn affect innovation. Moreover, budgetary participation intensity affects indirectly innovation when these variables are embedded in Path Analysis Modeling as mediators between budgetary participation and innovation.