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Innovation and jobs: evidence from manufacturing firms

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Author Info
Garcia, Angel
Jaumandreu, Jordi
Rodriguez, Cesar

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Abstract

This paper is aimed at structurally assessing the employment effects of the innovative activities of firms. We estimate firm level displacement and compensation effects in a model in which the stock of knowledge capital raises firm relative efficiency through process innovations and firm demand through product innovations. Displacement is estimated from the elasticity of employment with respect to innovation in the (conditional or Hicksian) demand for labour. Compensation effects are estimated from a firm-specific demand relationship. We also assess the enlargement and weakening of these effects due to firm agents’ behaviour aimed at appropriating innovation rents. We find that the potential employment compensation effect of process innovations surpasses the displacement effect, both in the short and long run (when competitors react), and that product innovation doubles the expanding impact by unit of expenditure, but also that agents’ behaviour can seriously reduce these effects. The actual elasticity of employment to knowledge capital is estimated, however, not far from unity, while “passive” productivity growth is suggested to have null or negative employment effects.

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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 1204.

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Date of creation: 2004
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Handle: RePEc:pra:mprapa:1204

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L0 - Industrial Organization - - General

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. Hall, Bronwyn H. & Mairesse, Jacques, 1995. "Exploring the relationship between R&D and productivity in French manufacturing firms," Journal of Econometrics, Elsevier, vol. 65(1), pages 263-293, January. [Downloadable!] (restricted)
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  2. 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)
  3. Hulten, Charles R, 1992. "Growth Accounting When Technical Change Is Embodied in Capital," American Economic Review, American Economic Association, vol. 82(4), pages 964-80, September. [Downloadable!] (restricted)
  4. Arellano, M. & Honore, B., 2000. "Panel Data Models: Some Recent Developments," Papers 0016, Centro de Estudios Monetarios Y Financieros-.
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  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. Van Reenen, John, 1996. "The Creation and Capture of Rents: Wages and Innovation in a Panel of U.K. Companies," The Quarterly Journal of Economics, MIT Press, vol. 111(1), pages 195-226, February. [Downloadable!] (restricted)
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  7. Charles R. Hulten, 1992. "Growth Accounting When Technical Change is Embodied in Capital," NBER Working Papers 3971, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  8. Stephen Machin & John Van Reenen, 1998. "Technology And Changes In Skill Structure: Evidence From Seven Oecd Countries," The Quarterly Journal of Economics, MIT Press, vol. 113(4), pages 1215-1244, November. [Downloadable!] (restricted)
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  9. Nickell, S & Vainiomaki, J & Wadhwani, S, 1994. "Wages and Product Market Power," Economica, London School of Economics and Political Science, vol. 61(244), pages 457-73, November. [Downloadable!] (restricted)
  10. Aguirregabiria, Victor & Alonso-Borrego, Cesar, 2001. "Occupational structure, technological innovation, and reorganization of production," Labour Economics, Elsevier, vol. 8(1), pages 43-73, January. [Downloadable!] (restricted)
  11. Richard Blundell & Stephen Bond, 2000. "GMM Estimation with persistent panel data: an application to production functions," Econometric Reviews, Taylor and Francis Journals, vol. 19(3), pages 321-340. [Downloadable!] (restricted)
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  12. Bruno Crepon & Emmanuel Duguet & Jacques Mairesse, 1998. "Research, Innovation, and Productivity: An Econometric Analysis at the Firm Level," NBER Working Papers 6696, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  13. Baker, Jonathan B. & Bresnahan, Timothy F., 1988. "Estimating the residual demand curve facing a single firm," International Journal of Industrial Organization, Elsevier, vol. 6(3), pages 283-300. [Downloadable!] (restricted)
  14. Abraham, Katharine G & Taylor, Susan K, 1996. "Firms' Use of Outside Contractors: Theory and Evidence," Journal of Labor Economics, University of Chicago Press, vol. 14(3), pages 394-424, July. [Downloadable!] (restricted)
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  15. 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)
  16. Nickell, S. & Komg, P., 1989. "Technical Progress And Jobs," Papers 366, London School of Economics - Centre for Labour Economics.
  17. Miguel A. Delgado & Jordi Jaumandreu & Ana Martín Marcos, 1999. "Input cost, capacity utilization and substitution in the short run," Spanish Economic Review, Springer, vol. 1(3), pages 239-262. [Downloadable!] (restricted)
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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. 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. Carmine Ornaghi, 2002. "Assessing The Effectos Of Measurement Errors On The Estimation Of The Production Function," Economics Working Papers we023314, Universidad Carlos III, Departamento de Economía. [Downloadable!]
  3. Carmine Ornaghi, 2002. "Spillovers In Product And Process Innovation: Evidence From Manufacturing Firms," Economics Working Papers we023213, Universidad Carlos III, Departamento de Economía. [Downloadable!]
  4. Peters, Bettina, 2004. "Employment Effects of Different Innovation Activities : Microeconometric Evidence," ZEW Discussion Papers 04-73, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research. [Downloadable!]
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