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Employment, innovation, and productivity: Evidence from italian microdata

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Author Info
Bronwyn H. Hall (University of California, Berkeley)
Francesca Lotti () (Bank of Italy, Research Department)
Jacques Mairesse (INSEE-CREST)

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Abstract

Italian manufacturing firms have been losing ground with respect to many of their European competitors. This paper presents some empirical evidence on the effects of innovation on employment growth and therefore on firmsÂ’ productivity with the goal of understanding the roots of such poor performance. We use firm level data from the last three surveys on Italian manufacturing firms conducted by Mediocredito-Capitalia, which cover the period 1995-2003. Using a modified version of the model proposed by Harrison, Jaumandreu, Mairesse and Peters (2005), which separates employment growth rates into those associated with old and new products, we provide robust evidence that there is no employment displacement effect stemming from process innovation. The sources of employment growth during the period are split equally between the net contribution of product innovation and the net contribution from sales growth of old products. However, the contribution of product innovation is somewhat lower than that for the four comparison European countries considered by Harrison et al.

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Paper provided by Bank of Italy, Economic Research Department in its series Temi di discussione (Economic working papers) with number 622.

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Date of creation: Apr 2007
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Handle: RePEc:bdi:wptemi:td_622_07

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Related research
Keywords: Innovation; employment; productivity; Italy.;

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Find related papers by JEL classification:
L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General
O31 - Economic Development, Technological Change, and Growth - - Technological Change - - - Innovation and Invention: Processes and Incentives
O33 - Economic Development, Technological Change, and Growth - - Technological Change - - - Technological Change: Choices and Consequences; Diffusion Processes

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Harrison, Rupert & Jaumandreu, Jordi & Mairesse, Jacques & Peters, Bettina, 2005. "Does innovation stimulate employment? A firm-level analysis using comparable micro data on four European countries," MPRA Paper 1245, University Library of Munich, Germany. [Downloadable!]
  2. Van Reenen, John, 1997. "Employment and Technological Innovation: Evidence from U.K. Manufacturing Firms," Journal of Labor Economics, University of Chicago Press, vol. 15(2), pages 255-84, April. [Downloadable!] (restricted)
  3. Zvi Griliches & Jacques Mairesse, 1984. "Productivity and R&D at the Firm Level," NBER Chapters, in: R & D, Patents, and Productivity, pages 339-374 National Bureau of Economic Research, Inc. [Downloadable!]
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  4. Stefan Lachenmaier & Horst Rottmann, 2006. "Employment Effects of Innovation at the Firm Level," Ifo Working Paper Series Ifo Working Papers No. 27, Ifo Institute for Economic Research at the University of Munich. [Downloadable!]
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  5. Mariacristina Piva & Marco Vivarelli, 2005. "Innovation and Employment: Evidence from Italian Microdata," Journal of Economics, Springer, vol. 86(1), pages 65-83, October. [Downloadable!] (restricted)
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  6. Brouwer, Erik & Kleinknecht, Alfred & Reijnen, Jeroen O N, 1993. "Employment Growth and Innovation at the Firm Level," Journal of Evolutionary Economics, Springer, vol. 3(2), pages 153-59, May.
  7. Zvi Griliches & Jacques Mairesse, 1981. "Productivity and R and D at the Firm Level," NBER Working Papers 0826, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  8. Zimmermann, Klaus F, 1991. "The Employment Consequences of Technological Advance, Demand and Labor Costs in 16 German Industries," Empirical Economics, Springer, vol. 16(2), pages 253-66.
  9. Doms, Mark & Dunne, Timothy & Roberts, Mark J., 1995. "The role of technology use in the survival and growth of manufacturing plants," International Journal of Industrial Organization, Elsevier, vol. 13(4), pages 523-542, December. [Downloadable!] (restricted)
  10. Francesca Lotti & Fabiano Schivardi, 2005. "Cross Country Differences in Patent Propensity: A Firm-Level Investigation," Giornale degli Economisti, GDE (Giornale degli Economisti e Annali di Economia), Bocconi University, vol. 64(4), pages 469-502, December. [Downloadable!]
  11. Bettina Peters, 2005. "Employment Effects of Different Innovation Activities: Microeconometric Evidence," Development and Comp Systems 0504002, EconWPA. [Downloadable!]
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Holger Breinlich & Alessandra Tucci, 2008. "Foreign Market Conditions and Export Performance: Evidence from Italian Firm-Level Data," Economics Discussion Papers 659, University of Essex, Department of Economics. [Downloadable!]
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  2. Heli Koski, 2008. "Public R&D Subsidies and Employment Growth - Microeconomic Evidence from Finnish Firms," Discussion Papers 1143, The Research Institute of the Finnish Economy. [Downloadable!]
  3. Bronwyn H. Hall & Francesca Lotti & Jacques Mairesse, 2008. "Innovation and Productivity in SMEs: Empirical Evidence for Italy," NBER Working Papers 14594, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  4. Rupert Harrison & Jordi Jaumandreu & Jacques Mairesse & Bettina Peters, 2008. "Does Innovation Stimulate Employment? A Firm-Level Analysis Using Comparable Micro-Data from Four European Countries," NBER Working Papers 14216, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  5. R. Cellini & L. Lambertini & A. Sterlacchini, 2009. "Managerial incentive and the firms' propensity to invest in product and process innovation," Working Papers 655, Dipartimento Scienze Economiche, Universita' di Bologna. [Downloadable!]
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