Lean manufacturing and productivity changes: the moderating role of R&D

Abstract

Purpose The purpose of this paper is to empirically investigate the effect of lean manufacturing on productivity changes and to identify the root sources of productivity changes. Furthermore, the authors explore the moderating effects of research and development (R&D) to examine the relationship between lean manufacturing and productivity changes. Design/methodology/approach This paper employs the propensity score matching (PSM) model combined with the difference-in-difference (DID) estimation to overcome the selectivity bias. The Malmquist productivity index is used to capture productivity changes. By analyzing 671 Chinese manufacturing listed firms from 2009 to 2014, the moderating effects of R&D on the relationship between lean manufacturing and productivity changes are measured. Findings The results reveal that lean manufacturing implementation has non-significant effects on productivity changes in principle, while a detailed analysis indicates that lean manufacturing could improve scale efficiency significantly. While engaged in R&D could significantly improve the efficiency of technological changes for lean manufacturing implementation firms, there exist negative effects on pure technical efficiency. Research limitations/implications This research only covers manufacturing listed firms in China. Further studies should extend the generalizability of the findings. Practical implications This study helps managers to identify the important role of R&D on the relationship between lean manufacturing and productivity changes and provides insights into how to improve the lean manufacturing performance. Originality/value This paper appears to be one of the earliest studies on the relationship between lean manufacturing and productivity changes by applying the PSM combined with DID estimation in Chinese manufacturing environment.