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The job creation effect of R&D expenditures

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Abstract

In this study we use a unique database covering 25 manufacturing and service sectors for 15 European countries over the period 1996-2005, for a total of 2,295 observations, and apply GMM-SYS panel estimations of a demand-for-labour equation augmented with technology. We find that R&D expenditures -fostering product innovation- have a job-creating effect, in accordance with the previous theoretical and empirical literature discussed in the paper. Interestingly enough, the labour-friendly nature of R&D emerges in both the flow and the stock specifications. These findings provide further justification for the European Lisbon-Barcelona targets.

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File URL: http://iri.jrc.ec.europa.eu/documents/10180/cdd21c77-b9de-4580-af62-a9c512aeb619
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Bibliographic Info

Paper provided by Institute of Prospective Technological Studies, Joint Research Centre in its series JRC-IPTS Working Papers on Corporate R&D and Innovation with number 2010-04.

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Length: 27 pages
Date of creation: Apr 2010
Date of revision:
Handle: RePEc:ipt:wpaper:201004

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Keywords: Technological change; corporate R&D; employment; product innovation; GMM-SYS;

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References

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  1. Blundell, R. & Bond, S., 1995. "Initial Conditions and Moment Restrictions in Dynamic Panel Data Models," Economics Papers 104, Economics Group, Nuffield College, University of Oxford.
  2. Conte, Andrea & Vivarelli, Marco, 2005. "One or Many Knowledge Production Functions? Mapping Innovative Activity Using Microdata," IZA Discussion Papers 1878, Institute for the Study of Labor (IZA).
  3. Richard Blundell & Stephen Bond, 2000. "GMM Estimation with persistent panel data: an application to production functions," Econometric Reviews, Taylor & Francis Journals, Taylor & Francis Journals, vol. 19(3), pages 321-340.
  4. Dobbs, I M & Hill, M B & Waterson, M, 1987. "Industrial Structure and the Employment Consequences of Technical Change," Oxford Economic Papers, Oxford University Press, vol. 39(3), pages 552-67, September.
  5. Hall, P. H. & Heffernan, S. A., 1985. "More on the employment effects of innovation," Journal of Development Economics, Elsevier, Elsevier, vol. 17(1-2), pages 151-162.
  6. Piva, Mariacristina & Vivarelli, Marco, 2003. "Innovation and Employment: Evidence from Italian Microdata," IZA Discussion Papers 730, Institute for the Study of Labor (IZA).
  7. Vivarelli, Marco, 2007. "Innovation and Employment: A Survey," IZA Discussion Papers 2621, Institute for the Study of Labor (IZA).
  8. Bronwyn H. Hall, 2010. "Measuring the Returns to R&D: The Depreciation Problem," NBER Chapters, in: Contributions in Memory of Zvi Griliches, pages 341-381 National Bureau of Economic Research, Inc.
  9. Brouwer, E. & Kleinknecht, Alfred & Reijnen, J.O.N., 1993. "Employment growth and innovation at the firm level," Open Access publications from Tilburg University urn:nbn:nl:ui:12-5662246, Tilburg University.
  10. Tommaso Antonucci & Mario Pianta, 2002. "Employment Effects of Product and Process Innovation in Europe," International Review of Applied Economics, Taylor & Francis Journals, Taylor & Francis Journals, vol. 16(3), pages 295-307.
  11. Francesco Aiello & Paola Cardamone, 2008. "R&D spillovers and firms’ performance in Italy," Empirical Economics, Springer, Springer, vol. 34(1), pages 143-166, February.
  12. Jacques Mairesse & Mohamed Sassenou, 1991. "R&D Productivity: A Survey of Econometric Studies at the Firm Level," NBER Working Papers 3666, National Bureau of Economic Research, Inc.
  13. Rinaldo Evangelista & Maria Savona, 2002. "The Impact of Innovation on Employment in Services: Evidence from Italy," International Review of Applied Economics, Taylor & Francis Journals, Taylor & Francis Journals, vol. 16(3), pages 309-318.
  14. Parisi, Maria Laura & Schiantarelli, Fabio & Sembenelli, Alessandro, 2006. "Productivity, innovation and R&D: Micro evidence for Italy," European Economic Review, Elsevier, Elsevier, vol. 50(8), pages 2037-2061, November.
  15. Bronwyn H. Hall & Jacques Mairesse, 1992. "Exploring the Relationship Between R&D and Productivity in French Manufacturing Firms," NBER Working Papers 3956, National Bureau of Economic Research, Inc.
  16. Brouwer, Erik & Kleinknecht, Alfred & Reijnen, Jeroen O N, 1993. "Employment Growth and Innovation at the Firm Level," Journal of Evolutionary Economics, Springer, Springer, vol. 3(2), pages 153-59, May.
  17. Neary, J Peter, 1981. "On the Short-Run Effects of Technological Progress," Oxford Economic Papers, Oxford University Press, vol. 33(2), pages 224-33, July.
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  22. Van Reenen, John, 1997. "Employment and Technological Innovation: Evidence from U.K. Manufacturing Firms," Journal of Labor Economics, University of Chicago Press, University of Chicago Press, vol. 15(2), pages 255-84, April.
  23. repec:sae:niesru:v:111:y::i:1:p:62-85 is not listed on IDEAS
  24. Mariacristina Piva & Marco Vivarelli, 2004. "Technological change and employment: some micro evidence from Italy," Applied Economics Letters, Taylor & Francis Journals, Taylor & Francis Journals, vol. 11(6), pages 373-376.
  25. Dosi, Giovanni, 1988. "Sources, Procedures, and Microeconomic Effects of Innovation," Journal of Economic Literature, American Economic Association, American Economic Association, vol. 26(3), pages 1120-71, September.
  26. Ronald Schettkat, 1997. "Book Review," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, Mohr Siebeck, Tübingen, vol. 153(2), pages 434-435, June.
  27. Petit, Pascal, 1993. "Employment and technical change," CEPREMAP Working Papers (Couverture Orange) 9330, CEPREMAP.
  28. Bogliacino, Francesco & Pianta, Mario, 2010. "Innovation and Employment: a Reinvestigation using Revised Pavitt classes," Research Policy, Elsevier, Elsevier, vol. 39(6), pages 799-809, July.
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Citations

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Cited by:
  1. Ilina Srour & Erol Taymaz & Marco Vivarelli, 2014. "Globalization, Technology and Skills: Evidence from Turkish Longitudinal Microdata," ERC Working Papers, ERC - Economic Research Center, Middle East Technical University 1405, ERC - Economic Research Center, Middle East Technical University, revised Jun 2014.
  2. Francesco Bogliacino & Mariacristina Piva & Marco Vivarelli, 2011. "Job Creation Effects of R&D Expenditures: Are High-tech Sectors the Key?," JRC-IPTS Working Papers on Corporate R&D and Innovation, Institute of Prospective Technological Studies, Joint Research Centre 2011-10, Institute of Prospective Technological Studies, Joint Research Centre.
  3. Vivarelli, Marco, 2012. "Innovation, Employment and Skills in Advanced and Developing Countries: A Survey of the Literature," IZA Discussion Papers 6291, Institute for the Study of Labor (IZA).
  4. Vivarelli, Marco, 2014. "Structural Change and Innovation as Exit Strategies from the Middle Income Trap," IZA Discussion Papers 8148, Institute for the Study of Labor (IZA).
  5. Horst Feldmann, 2013. "Technological unemployment in industrial countries," Journal of Evolutionary Economics, Springer, Springer, vol. 23(5), pages 1099-1126, November.
  6. Antonio Vezzani & Sandro Montresor, 2013. "The production function of top R&D investors: Accounting for size and sector heterogeneity with quantile estimations," JRC-IPTS Working Papers on Corporate R&D and Innovation, Institute of Prospective Technological Studies, Joint Research Centre 2013-02, Institute of Prospective Technological Studies, Joint Research Centre.

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