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

Author

Listed:
  • Harrison, Rupert
  • Jaumandreu, Jordi
  • Mairesse, Jacques
  • Peters, Bettina

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.

Suggested Citation

  • 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.
    • Handle: RePEc:pra:mprapa:1245
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    References listed on IDEAS

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    More about this item

    Keywords

    process innovations; product innovations; employment; growth;
    All these keywords.

    JEL classification:

    • L20 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - General

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