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Employment and innovation in recessions: firm-level evidence from European Countries
[The race between man and machine: implications of technology for growth, factor shares, and employment]

Author

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  • Bettina Peters
  • Berhnard Dachs
  • Martin Hud
  • Christian Köhler

Abstract

This paper investigates the employment effects of innovation over the business cycle with a large data set of manufacturing firms from 26 European countries from 1998 to 2014. The paper reveals four important findings: First, the net employment effect of product innovation is pro-cyclical and positive except in recessions. Second, product innovators are more resilient in recessions than non-product innovators because they are able to substitute demand losses in old products with new products. As a result, the net employment losses of product innovators are significantly lower in recessions than those of non-product innovators. Third, we find resilience only among small and medium-sized enterprises (SMEs), but not among large firms. Fourth, process and organizational innovations displace labor primarily during upturn and downturn periods.

Suggested Citation

  • Bettina Peters & Berhnard Dachs & Martin Hud & Christian Köhler, 2022. "Employment and innovation in recessions: firm-level evidence from European Countries [The race between man and machine: implications of technology for growth, factor shares, and employment]," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 31(6), pages 1460-1493.
    • Handle: RePEc:oup:indcch:v:31:y:2022:i:6:p:1460-1493.
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    File URL: http://hdl.handle.net/10.1093/icc/dtac040
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    Cited by:

    1. Agnes Kügler & Klaus Friesenbichler & Jürgen Janger, 2023. "Innovationen und Investitionen österreichischer Unternehmen in der Krise," WIFO Studies, WIFO, number 70681, February.
    2. Agnes Kügler & Nicole Schmidt-Padickakudy & Tim Slickers, 2023. "Ausgaben der Unternehmen für Produktneueinführungen 2022 gekürzt," WIFO Monatsberichte (monthly reports), WIFO, vol. 96(6), pages 407-418, June.
    3. Wifo, 2023. "WIFO-Monatsberichte, Heft 6/2023," WIFO Monatsberichte (monthly reports), WIFO, vol. 96(6), June.

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