Does innovation stimulate employment? A firm-level analysis using comparable micro data on four European countries

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Does innovation stimulate employment? A firm-level analysis using comparable micro data on four European countries

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Harrison, Rupert
Jaumandreu, Jordi
Mairesse, Jacques
Peters, Bettina

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Abstract

This paper studies the impact of process and product innovations introduced by firms on their employment growth. A model that relates employment growth to process innova- tions and to the growth of sales due to innovative and unchanged products is derived and estimated using a unique source of comparable firm-level data from France, Germany, Spain and the UK. Results for manufacturing show that, although process innovation tends to displace employment, compensation e ﬀects are prevalent, and product innova- tion is associated with employment growth. In the service sector there is less evidence of displacement e ﬀects, and growth in sales of new products accounts for a non-negligible proportion of employment growth. Overall the results are similar across countries, with some interesting exceptions.

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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 1245.

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Date of creation: 2005
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Handle: RePEc:pra:mprapa:1245

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Find related papers by JEL classification:
L20 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - 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.:

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. [Downloadable!] (restricted)
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!]
Other versions:
- Bettina Peters, 2005. "Employment Effects of Different Innovation Activities: Microeconometric Evidence," Development and Comp Systems 0504002, EconWPA. [Downloadable!]
- Peters, Bettina, 2005. "Employment Effects of Different Innovation Activities: Microeconometric Evidence," ZEW Discussion Papers 04-73 [rev.], ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research. [Downloadable!]
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)
Marco Vivarelli, 2007. "Innovation and Employment: A Survey," IZA Discussion Papers 2621, Institute for the Study of Labor (IZA). [Downloadable!]
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)
Other versions:
- Machin, S. & Van Reenen, J., 1997. "Technology and Changes in Skill Structure: Evidence from Seven OECD Countries," Papers 24, Centre for Economic Performance & Institute of Economics.
- Stephen Machin & John Van Reenen, 1998. "Technology and changes in skill structure: evidence from seven OECD countries," IFS Working Papers W98/04, Institute for Fiscal Studies.
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Bronwyn H. Hall & Jacques Mairesse, 1995. "Exploring the Relationship Between R&D and Productivity in French Manufacturing Firms," NBER Working Papers 3956, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
Other versions:
- 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)
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)
Nickell, S. & Komg, P., 1989. "Technical Progress And Jobs," Papers 366, London School of Economics - Centre for Labour Economics.
Rachel Griffith & Elena Huergo & Jacques Mairesse & Bettina Peters, 2006. "Innovation and Productivity across Four European Countries," NBER Working Papers 12722, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
Other versions:
- Rachel Griffith & Elena Huergo & Jacques Mairesse & Bettina Peters, 2006. "Innovation and Productivity Across Four European Countries," Oxford Review of Economic Policy, Oxford University Press, vol. 22(4), pages 483-498, Winter.
Huergo, Elena & Jaumandreu, Jordi, 2004. "Firms' age, process innovation and productivity growth," International Journal of Industrial Organization, Elsevier, vol. 22(4), pages 541-559, April. [Downloadable!] (restricted)
Nickell, Stephen, 1999. "Product markets and labour markets1," Labour Economics, Elsevier, vol. 6(1), pages 1-20, March. [Downloadable!] (restricted)

Full references

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.)

A. Coad & R. Rao, 2007. "The Employment Effects of Innovations in High-Tech Industries," Papers on Econonmics and Evolution 2007-05, Max Planck Institute of Economics, Evolutionary Economics Group. [Downloadable!]
Bronwyn H. Hall & Francesca Lotti & Jacques Mairesse, 2007. "Employment, Innovation, and Productivity: Evidence from Italian Microdata," NBER Working Papers 13296, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
Other versions:
- Bronwyn Hall & Francesca Lotti & Jacques Mairesse, 2006. "Employment, innovation and productivity: evidence from Italian microdata," IFS Working Papers W06/24, Institute for Fiscal Studies. [Downloadable!]
- Hall, Bronwyn H. & Mairesse, Jacques & Lotti, Francesca, 2006. "Employment, Innovation, and Productivity: Evidence from Italian Microdata," UNU-MERIT Working Paper Series 043, United Nations University, Maastricht Economic and social Research and training centre on Innovation and Technology. [Downloadable!]
- Bronwyn H. Hall & Francesca Lotti & Jacques Mairesse, 2007. "Employment, innovation, and productivity: Evidence from italian microdata," Temi di discussione (Economic working papers) 622, Bank of Italy, Economic Research Department. [Downloadable!]
- Jacques Mairesse, 2008. "Employment, innovation, and productivity: evidence from Italian microdata," Industrial and Corporate Change, Oxford University Press, vol. 17(4), pages 813-839, August. [Downloadable!] (restricted)
Jyrki Ali-Yrkkö, 2005. "Impact of Public R&D Financing on Employment," Economics Working Papers 039, European Network of Economic Policy Research Institutes. [Downloadable!]
Stefan Lachenmaier & Horst Rottmann, 2007. "Effects of Innovation on Employment: A Dynamic Panel Analysis," CESifo Working Paper Series CESifo Working Paper No. , CESifo GmbH. [Downloadable!]
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!]
Other versions:
- Bettina Peters, 2005. "Employment Effects of Different Innovation Activities: Microeconometric Evidence," Development and Comp Systems 0504002, EconWPA. [Downloadable!]
- Peters, Bettina, 2005. "Employment Effects of Different Innovation Activities: Microeconometric Evidence," ZEW Discussion Papers 04-73 [rev.], ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research. [Downloadable!]

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