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Innovation Policy and Employment: Evidence from an Impact Evaluation in Argentina

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  • Victoria Castillo
  • Alessandro Maffioli
  • Sofía Rojo
  • Rodolfo Stucchi

Abstract

This paper presents the evaluation of the Enterprise Restructuring Support Program in Argentina. The aim of the program was to increase the competitiveness of small and medium-sized enterprises by cofinancing technical assistance that can be classified as either support for process innovation or support for product innovation. Although these types of programs do not primarily aim to create jobs, they are implemented assuming that they do, or at least that they do not destroy jobs. This paper tests this assumption. It compares the impact of each type of support on employment and the type of employment measured by the wages paid by firms to their employees. To control for self-selection into the program, propensity score matching and difference in differences were combined. The study found that by supporting both process and product innovation-related activities, the program was able to create more and better jobs. The effect on wages was also found to be higher when supporting product innovation activities.

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Bibliographic Info

Paper provided by Inter-American Development Bank in its series IDB Publications with number 60458.

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Date of creation: Dec 2011
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Handle: RePEc:idb:brikps:60458

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Keywords: Private Sector :: SME; Labor :: Workforce & Employment; Science & Technology :: Research & Development; Science & Technology :: New Technologies; innovation; employment; wages; policy evaluation; SMEs; Argentina;

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  1. Charles R. Hulten & Edwin R. Dean & Michael J. Harper, 2001. "New Developments in Productivity Analysis," NBER Books, National Bureau of Economic Research, Inc, number hult01-1, July.
  2. Harrison, Rupert & Jaumandreu Balanzo, Jordi & Mairesse, Jacques & Peters, Bettina, 2008. "Does Innovation Stimulate Employment? A Firm-Level Analysis Using Comparable Micro-Data From Four European Countries," ZEW Discussion Papers 08-111, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  3. Jose Miguel Benavente & Rodolfo Lauterbach, 2008. "Technological innovation and employment: complements or substitutes?," European Journal of Development Research, Taylor and Francis Journals, vol. 20(2), pages 318-329.
  4. Bronwyn Hall & Alessandro Maffioli, 2008. "Evaluating the impact of technology development funds in emerging economies: evidence from Latin America," European Journal of Development Research, Taylor and Francis Journals, vol. 20(2), pages 172-198.
  5. David Giuliodori & Rodolfo Stucchi, 2012. "Innovation and job creation in a dual labor market: evidence from Spain," Economics of Innovation and New Technology, Taylor and Francis Journals, vol. 21(8), pages 801-813, November.
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  8. Veugelers, Reinhilde & Cassiman, Bruno, 1999. "Make and buy in innovation strategies: evidence from Belgian manufacturing firms," Research Policy, Elsevier, vol. 28(1), pages 63-80, January.
  9. Gadi Barlevy, 2007. "On the Cyclicality of Research and Development," American Economic Review, American Economic Association, vol. 97(4), pages 1131-1164, September.
  10. Eli Berman & John Bound & Zvi Griliches, 1994. "Changes in the Demand for Skilled Labor within U.S. Manufacturing Industries: Evidence from the Annual Survey of Manufacturing," NBER Working Papers 4255, National Bureau of Economic Research, Inc.
  11. Ricardo Monge-González & Juan A. Rodríguez-Alvarez & John Hewitt & Jeffrey Orozco & Keynor Ruiz, 2011. "Innovation and Employment Growth in Costa Rica: A Firm-level Analysis," IDB Publications 54278, Inter-American Development Bank.
  12. Berman, Eli & Bound, John & Griliches, Zvi, 1994. "Changes in the Demand for Skilled Labor within U.S. Manufacturing: Evidence from the Annual Survey of Manufactures," The Quarterly Journal of Economics, MIT Press, vol. 109(2), pages 367-97, May.
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