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Human capital and innovation in East and West German manufacturing firms

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  • Pfeiffer, Friedhelm

Abstract

The paper analyses the theoretical and empirical relationship between employment, skill structure and innovation in East and West German manufacturing firms. The econometric part builds on firm data from the Mannheim Innovation Panel 1993, 1994 and 1995. In the German industrial sector, especially in East Germany, employment has declined and the share of highly skilled labour has risen. The econometric investigation of labour demand, based on the translog production function, reveals differences in the firms? behaviour in East and West German manufacturing and between innovative and non-innovative firms. It is shown that complex patterns of substitution between capital and different types of labour emerge, which depend on the stage of economic transformation, the type of firms, wage setting behaviour and public policy. The results suggest that in the current stage of transition subsidising labour might be more effective for creating jobs in East Germany than promoting R&D and capital equipment. Subsidies can be lower the higher the workers? qualification level is.

Suggested Citation

  • Pfeiffer, Friedhelm, 1997. "Human capital and innovation in East and West German manufacturing firms," ZEW Discussion Papers 97-08, ZEW - Leibniz Centre for European Economic Research.
    • Handle: RePEc:zbw:zewdip:5117
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    Cited by:

    1. Stoetzer Matthias-Wolfgang & Ernst Daniel, 2015. "Arbeitsplatzeffekte von Innovationen auf Unternehmensebene: Eine Meta-Analyse der empirischen Evidenz," Perspektiven der Wirtschaftspolitik, De Gruyter, vol. 16(2), pages 173-188, June.
    2. Bellmann, Lutz & Kohaut, Susanne, 1999. "Betriebliche Beschäftigungsentwicklung und Innovationsaktivitäten : Ergebnisse aus dem IAB-Betriebspanel 1998," Mitteilungen aus der Arbeitsmarkt- und Berufsforschung, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 32(4), pages 416-422.
    3. Harabi, Najib, 2000. "Employment Effects of Ecological Innovations: An Empirical Analysis," MPRA Paper 4395, University Library of Munich, Germany.
    4. Medase, Kehinde, 2019. "The Impact of the Heterogeneity of Employees’ Qualifications on Firm-level Innovation Evidence from Nigerian Firms," VfS Annual Conference 2019 (Leipzig): 30 Years after the Fall of the Berlin Wall - Democracy and Market Economy 203563, Verein für Socialpolitik / German Economic Association.
    5. Kölling, Arnd, 1998. "Dynamische Arbeitsnachfrage und asymmetrisches Anpassungsverhalten in der Bundesrepublik Deutschland : eine Untersuchung mit Daten aus dem IAB-Betriebspanel (Dynamic labour demand and asymmetrical adj," Mitteilungen aus der Arbeitsmarkt- und Berufsforschung, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 31(4), pages 637-647.
    6. Bellmann, Lutz & Kohaut, Susanne, 1999. "Betriebliche Beschäftigungsentwicklung und Innovationsaktivitäten : Ergebnisse aus dem IAB-Betriebspanel 1998," Mitteilungen aus der Arbeitsmarkt- und Berufsforschung, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 32(4), pages 416-422.
    7. Spyros Arvanitis & Juliette von Arx, 2004. "Bestimmungsfaktoren der Innovationstätigkeit und deren Einfluss auf Arbeitsproduktivität, Beschäftigung und Qualifikationsstruktur," KOF Working papers 04-91, KOF Swiss Economic Institute, ETH Zurich.
    8. Kölling, Arnd, 1998. "Dynamische Arbeitsnachfrage und asymmetrisches Anpassungsverhalten in der Bundesrepublik Deutschland : eine Untersuchung mit Daten aus dem IAB-Betriebspanel (Dynamic labour demand and asymmetrical adj," Mitteilungen aus der Arbeitsmarkt- und Berufsforschung, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 31(4), pages 637-647.

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    More about this item

    JEL classification:

    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General

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