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The impact of innovation on employment: firm- and industry-level evidence from Estonia

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Author Info
Jaanika Meriküll ()
Abstract

This paper investigates the implication of innovation on employment at the firm and industry levels. The paper contributes to the literature in two respects. First, it proceeds from the data of a catch-up country undergoing a very rapid economic development. Most of the empirical investigations use data from developed and technologically leading countries. The second contribution concerns the nature of the data in use; we develop a unique database merging the data of the Estonian Commercial Register with two consecutive Estonian Community Innovation Surveys (CIS), the CISIII for 1998-2000 and CISIV for 2002-2004. Our results coincide with the results on developed economies in the respect that innovation activity has a positive effect on employment and that product innovation has a stronger and a more positive employment effect. Both of these effects are consistent over firm and industry levels. This result is also confirmed by the insignificance of the spillover effects of an industry\'s innovation on employment by firms

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File URL: http://www.eestipank.info/pub/en/dokumendid/publikatsioonid/seeriad/uuringud/_2008/_1_2008/_wp_108.pdf
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Publisher Info
Paper provided by Bank of Estonia in its series Bank of Estonia Working Papers with number 2008-01.

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Date of creation: 30 Oct 2008
Date of revision: 30 Oct 2008
Handle: RePEc:eea:boewps:wp2008-1

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Postal: Estonia bld. 13, 15095 Tallinn, ESTONIA
Phone: +3726680719
Fax: +3726680900
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Web page: http://www.bankofestonia.info
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Postal: Estonia bld. 13, 15095 Tallinn, ESTONIA
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Related research
Keywords: innovation (technological change); employment; catch-up economy;

Find related papers by JEL classification:
J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
O33 - Economic Development, Technological Change, and Growth - - Technological Change - - - Technological Change: Choices and Consequences; Diffusion Processes
D21 - Microeconomics - - Production and Organizations - - - Firm Behavior

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References listed on IDEAS
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  1. Arellano, Manuel & Bond, Stephen, 1991. "Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations," Review of Economic Studies, Blackwell Publishing, vol. 58(2), pages 277-97, April. [Downloadable!] (restricted)
  2. Evangelista, Rinaldo & Savona, Maria, 2003. "Innovation, employment and skills in services. Firm and sectoral evidence," Structural Change and Economic Dynamics, Elsevier, vol. 14(4), pages 449-474, December. [Downloadable!] (restricted)
  3. Fung, Michael K., 2006. "Are labor-saving technologies lowering employment in the banking industry?," Journal of Banking & Finance, Elsevier, vol. 30(1), pages 179-198, January. [Downloadable!] (restricted)
  4. Rouvinen, Petri, 2002. "Characteristics of Product and Process Innovators: Some Evidence from the Finnish Innovation Survey," Applied Economics Letters, Taylor and Francis Journals, vol. 9(9), pages 575-80, July. [Downloadable!] (restricted)
  5. 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)
  6. Toke Reichstein & Ammon Salter, 2006. "Investigating the sources of process innovation among UK manufacturing firms," Industrial and Corporate Change, Oxford University Press, vol. 15(4), pages 653-682, August.
  7. 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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  8. Stefan Lachenmaier & Horst Rottmann, 2007. "Effects of Innovation on Employment: A Dynamic Panel Analysis," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
  9. Nickell, Stephen J, 1981. "Biases in Dynamic Models with Fixed Effects," Econometrica, Econometric Society, vol. 49(6), pages 1417-26, November. [Downloadable!] (restricted)
  10. 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:
  11. Davis, Steven J & Haltiwanger, John C, 1992. "Gross Job Creation, Gross Job Destruction, and Employment Reallocation," The Quarterly Journal of Economics, MIT Press, vol. 107(3), pages 819-63, August. [Downloadable!] (restricted)
    Other versions:
  12. Smolny, Werner, 1998. "Innovations, Prices and Employment: A Theoretical Model and an Empirical Application for West German Manufacturing Firms," Journal of Industrial Economics, Blackwell Publishing, vol. 46(3), pages 359-81, September. [Downloadable!] (restricted)
  13. Jan Fagerberg, 2003. "Innovation: A Guide to the Literature," Working Papers on Innovation Studies 20031012, Centre for Technology, Innovation and Culture, University of Oslo. [Downloadable!]
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