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Innovation and employment: A firm level analysis with European R&D Scoreboard data

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  • Francesco Bogliacino

    (Fundación Universitaria “Konrad Lorenz”, Bogotá, Colombia)

Abstract

This article analyzes the microeconomic relation between innovation and employment, using company data from R&D Scoreboard for Europe covering 2000–2008. A reduced form equation in which R&D can account for both product and process innovation is estimated. The existence of non-constant elasticities is assessed, due to the combination of efficient scale and decreasing return to R&D: in our empirical estimates the scale effect tends to prevail for a given R&D intensity generating an increasing relation between total turnover and employment. These results have important implications for policymakers: innovation supporting policies should be correctly tailored and monitored since the results depend on the characteristics of the benefiting firms. Moreover, R&D intensity on GDP should be managed with care if taken as a policy target, given that the denominator is endogenous and non-linearly dependent on research expenditure.

Suggested Citation

  • Francesco Bogliacino, 2014. "Innovation and employment: A firm level analysis with European R&D Scoreboard data," Economia, ANPEC - Associação Nacional dos Centros de Pós-Graduação em Economia [Brazilian Association of Graduate Programs in Economics], vol. 15(2), pages 141-154.
    • Handle: RePEc:anp:econom:v:15:y:2014:2:141_154
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    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
    • J20 - Labor and Demographic Economics - - Demand and Supply of Labor - - - General

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