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Does innovation stimulate employment? Evidence from China

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  • Zhu, Chen
  • Qiu, Zhiyi
  • Liu, Fengjun

Abstract

Innovation and employment are important topics in emerging economies. This paper focuses on the impact of technological innovation on employment in China. Specifically, we examine the different impact of product and process innovation on employment and test the impact with data extracted from survey conducted by the World Bank. The results show that process innovation exerts a positive effect on employment while product innovation has a negative effect. Specifically, the positive effect on job creation comes from the increase in sales of old products, while the negative effect comes from the increase in productivity of new products. The impact of innovation differs across firms because of different labor skill structures. Further, we find that better-educated but less-skilled labor benefits more from the positive effect of process innovation and process innovation is a mediating variable for product innovation.

Suggested Citation

  • Zhu, Chen & Qiu, Zhiyi & Liu, Fengjun, 2021. "Does innovation stimulate employment? Evidence from China," Economic Modelling, Elsevier, vol. 94(C), pages 1007-1017.
    • Handle: RePEc:eee:ecmode:v:94:y:2021:i:c:p:1007-1017
    DOI: 10.1016/j.econmod.2020.02.041
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    3. Ahmad, Najid & Youjin, Liu & Žiković, Saša & Belyaeva, Zhanna, 2023. "The effects of technological innovation on sustainable development and environmental degradation: Evidence from China," Technology in Society, Elsevier, vol. 72(C).
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    5. Chao Wu & Yu Hua, 2023. "Does Environmental Regulation Have an Employment Dividend? Evidence from China," Sustainability, MDPI, vol. 15(7), pages 1-20, April.
    6. Shuai Qin & Xiaolan Chen, 2023. "The role of entrepreneurship policy and culture in transitional routes from entrepreneurial intention to job creation: a moderated mediation model," SN Business & Economics, Springer, vol. 3(3), pages 1-25, March.
    7. Qi, Wenhao & Li, Biao & Liu, Qiqi & Lv, Jiaqi, 2023. "Low-skill lock-in? Financial resource mismatch and low-skilled labor demand," Finance Research Letters, Elsevier, vol. 55(PB).
    8. Xiao Ling & Zhangwei Luo & Yanchao Feng & Xun Liu & Yue Gao, 2023. "How does digital transformation relieve the employment pressure in China? Empirical evidence from the national smart city pilot policy," Palgrave Communications, Palgrave Macmillan, vol. 10(1), pages 1-17, December.
    9. Sinha, Avik & Adhikari, Arnab & Jha, Ashish Kumar, 2021. "Innovational Duality and Sustainable Development: Finding Optima amidst Socio-Ecological Policy Trade-off in post-COVID-19 Era," MPRA Paper 110946, University Library of Munich, Germany, revised 2021.
    10. Su, Chi-Wei & Yuan, Xi & Umar, Muhammad & Lobonţ, Oana-Ramona, 2022. "Does technological innovation bring destruction or creation to the labor market?," Technology in Society, Elsevier, vol. 68(C).
    11. Keraga, Mezid N. & Stephan, Andreas, 2023. "Does innovation stimulate employment in Africa? New firm-level evidence from the Worldbank Enterprise Survey," Working Paper Series in Economics and Institutions of Innovation 494, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.

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