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Innovation, employment growth, and foreign ownership of firms

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Author Info

  • Dachs, Bernhard
  • Peters, Bettina

Abstract

This paper examines how foreign-owned and domestically owned firms transform innovation into employment growth. The empirical analysis, based on the model of Harrison et al. (2008) and CIS data for 16 countries, reveals important differences between the two groups: Due to general productivity increases and process innovation, foreign-owned firms experience higher job losses than domestically owned firms. At the same time, employment-creating effects of product innovation are larger for foreign-owned firms. Together with employment-stimulating effects stemming from existing products, they overcompensate the negative displacement effects resulting in net employment growth in foreign-owned firms. However, net employment growth turns out to be smaller in foreign-owned firms than in domestically owned firms.

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Bibliographic Info

Article provided by Elsevier in its journal Research Policy.

Volume (Year): 43 (2014)
Issue (Month): 1 ()
Pages: 214-232

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Handle: RePEc:eee:respol:v:43:y:2014:i:1:p:214-232

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Web page: http://www.elsevier.com/locate/respol

Related research

Keywords: Employment; Innovation; Foreign ownership; Community Innovation Survey; Host country effects;

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References

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Citations

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Cited by:
  1. Camilla Jensen & Itzhak Goldberg, 2014. "Demand-driven innovation policies in the EU," CASE Network Studies and Analyses 0467, CASE-Center for Social and Economic Research.
  2. Mate-Sanchez-Val, Mariluz & Harris, Richard, 2014. "Differential empirical innovation factors for Spain and the UK," Research Policy, Elsevier, vol. 43(2), pages 451-463.
  3. repec:idb:brikps:54258 is not listed on IDEAS
  4. Dirk Czarnitzki & Julie Delanote, 2013. "Young Innovative Companies: the new high-growth firms?," Industrial and Corporate Change, Oxford University Press, vol. 22(5), pages 1315-1340, October.
  5. Dutz, Mark A. & Kessides, Ioannis & O'Connell, Stephen & Willig, Robert D., 2011. "Competition and innovation-driven inclusive growth," Policy Research Working Paper Series 5852, The World Bank.

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