IDEAS home Printed from https://ideas.repec.org/a/jns/jbstat/v229y2009i2-3p313-326.html
   My bibliography  Save this article

The Impact of Innovation on Employment in Small and Medium Enterprises with Different Growth Rates

Author

Listed:
  • Zimmermann Volker

    (KfW Bankengruppe, Palmengartenstr. 5–9, 60325 Frankfurt a.M., Germany)

Abstract

This article examines the impact of innovation on employment growth in innovating small and medium enterprises. In contrast to existing studies, which typically use the least squares estimation technique, quantile regressions were carried out to analyse the data. This method allows one to examine the effects of innovation at any desired point on the distribution function - for example, in firms experiencing positive or negative growth - providing a more complete picture of the relationship between innovation and employment growth than the standard method of viewing deviations in the average effect. The key finding of the study is that innovation has a positive effect on employment in both growing and shrinking small and medium enterprises. In addition, innovation has a much stronger impact on employee headcounts in companies that are already experiencing strong growth than in their slower growing or shrinking counterparts. When differentiating between product and process innovations, the analysis shows that the introduction of new or improved processes has a larger impact on employment than product innovations. Thus, positive employment effects of innovations are not restricted to narrow segments of the economy. Economic policy aimed at bolstering the innovative strength of firms is thus a strong encouragement to employment on a broad basis.

Suggested Citation

  • Zimmermann Volker, 2009. "The Impact of Innovation on Employment in Small and Medium Enterprises with Different Growth Rates," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 229(2-3), pages 313-326, April.
    • Handle: RePEc:jns:jbstat:v:229:y:2009:i:2-3:p:313-326
    DOI: 10.1515/jbnst-2009-2-314
    as

    Download full text from publisher

    File URL: https://doi.org/10.1515/jbnst-2009-2-314
    Download Restriction: no
    File URL: https://libkey.io/10.1515/jbnst-2009-2-314?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Lachenmaier Stefan & Rottmann Horst, 2007. "Employment Effects of Innovation at the Firm Level," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 227(3), pages 254-272, June.
    2. Koenker, Roger W & Bassett, Gilbert, Jr, 1978. "Regression Quantiles," Econometrica, Econometric Society, vol. 46(1), pages 33-50, January.
    3. Welsch, Johann, 2006. "Paradigmenwechsel beim Zusammenhang von Innovation und Beschäftigung?," Wirtschaftsdienst – Zeitschrift für Wirtschaftspolitik (1949 - 2007), ZBW - Leibniz Information Centre for Economics, vol. 86(12), pages 811-820.
    4. Evans, David S, 1987. "Tests of Alternative Theories of Firm Growth," Journal of Political Economy, University of Chicago Press, vol. 95(4), pages 657-674, August.
    5. repec:jns:jbstat:v:227:y:2007:i:3:p:254-272 is not listed on IDEAS
    6. Gaskins, Darius Jr., 1971. "Dynamic limit pricing: Optimal pricing under threat of entry," Journal of Economic Theory, Elsevier, vol. 3(3), pages 306-322, September.
    7. Utterback, James M & Abernathy, William J, 1975. "A dynamic model of process and product innovation," Omega, Elsevier, vol. 3(6), pages 639-656, December.
    8. Gort, Michael & Klepper, Steven, 1982. "Time Paths in the Diffusion of Product Innovations," Economic Journal, Royal Economic Society, vol. 92(367), pages 630-653, September.
    9. Stefan Lachenmaier, 2007. "Effects of innovation on firm performance," ifo Beiträge zur Wirtschaftsforschung, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, number 28.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Jens Horbach & Markus Janser, 2016. "The role of innovation and agglomeration for employment growth in the environmental sector," Industry and Innovation, Taylor & Francis Journals, vol. 23(6), pages 488-511, August.
    2. Giovanni Dosi & Xiaodan Yu, 2017. "Technological catching-up, sales dynamics and employment growth: evidence from China's manufacturing firms," LEM Papers Series 2017/27, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
    3. Michaela Fuchs & Udo Brixy, 2011. "How important are plant and regional characteristics for employment dynamics? Plant-level evidence for Germany," ERSA conference papers ersa10p243, European Regional Science Association.
    4. Horbach, Jens & Rennings, Klaus, 2012. "Environmental innovation and employment dynamics in different technology fields: An analysis based on the German community innovation survey 2009," ZEW Discussion Papers 12-006, ZEW - Leibniz Centre for European Economic Research.
    5. Flavio Calvino, 2016. "Technological Innovation and the Distribution of Employment Growth: a firm-level analysis," LEM Papers Series 2016/37, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
    6. Flavio Calvino & Maria Enrica Virgillito, 2018. "The Innovation†Employment Nexus: A Critical Survey Of Theory And Empirics," Journal of Economic Surveys, Wiley Blackwell, vol. 32(1), pages 83-117, February.
    7. Martin Falk, 2012. "Quantile estimates of the impact of R&D intensity on firm performance," Small Business Economics, Springer, vol. 39(1), pages 19-37, July.
    8. Priscilla Twumasi Baffour & F. Ebo Turkson & Agyapomaa Gyeke-Dako & Abena D. Oduro & Emmanuel Nii Abbey, 2020. "Innovation and employment in manufacturing and service firms in Ghana," Small Business Economics, Springer, vol. 54(4), pages 1153-1164, April.
    9. Pantea, Smaranda & Sabadash, Anna & Biagi, Federico, 2017. "Are ICT displacing workers in the short run? Evidence from seven European countries," Information Economics and Policy, Elsevier, vol. 39(C), pages 36-44.
    10. Falk Martin, 2015. "Employment Effects of Technological and Organizational Innovations: Evidence Based on Linked Firm-Level Data for Austria," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 235(3), pages 268-285, June.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Zimmermann, Volker, 2008. "The Impact of Innovation on Employment in Small and Medium Enterprises with Different Growth Rates," ZEW Discussion Papers 08-134, ZEW - Leibniz Centre for European Economic Research.
    2. Martin Falk, 2012. "Quantile estimates of the impact of R&D intensity on firm performance," Small Business Economics, Springer, vol. 39(1), pages 19-37, July.
    3. Jose A. F. Machado & Jose Mata, 2000. "Box-Cox quantile regression and the distribution of firm sizes," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 15(3), pages 253-274.
    4. Tavassoli, Sam, 2015. "Innovation determinants over industry life cycle," Technological Forecasting and Social Change, Elsevier, vol. 91(C), pages 18-32.
    5. Viktoria Kocsis & Victoria Shestalova & Henry van der Wiel & Nick Zubanov & Ruslan Lukach & Bert Minne, 2009. "Relation entry, exit and productivity: an overview of recent theoretical and empirical literature," CPB Document 180.rdf, CPB Netherlands Bureau for Economic Policy Analysis.
    6. Montresor, Sandro & Vezzani, Antonio, 2015. "The production function of top R&D investors: Accounting for size and sector heterogeneity with quantile estimations," Research Policy, Elsevier, vol. 44(2), pages 381-393.
    7. Filson, Darren, 2002. "Product and process innovations in the life cycle of an industry," Journal of Economic Behavior & Organization, Elsevier, vol. 49(1), pages 97-112, September.
    8. Lalit Manral, 2015. "The demand-side dynamics of entrant heterogeneity," Journal of Evolutionary Economics, Springer, vol. 25(2), pages 401-445, April.
    9. Nadine Levratto & Aziza Garsaa & Luc Tessier, 2013. "La Corse est-elle soluble dans le modèle méditerranéen ? Une analyse à partir d’une régression quantile sur données d’entreprises en panel entre 2004 et 2010. Is the Corsican economy a part of the Med," EconomiX Working Papers 2013-20, University of Paris Nanterre, EconomiX.
    10. Silviano Esteve-Pérez & Fabio Pieri & Diego Rodriguez, 2018. "Age and productivity as determinants of firm survival over the industry life cycle," Industry and Innovation, Taylor & Francis Journals, vol. 25(2), pages 167-198, February.
    11. Viktoria Kocsis & Victoria Shestalova & Henry van der Wiel & Nick Zubanov & Ruslan Lukach & Bert Minne, 2009. "Relation entry, exit and productivity: an overview of recent theoretical and empirical literature," CPB Document 180, CPB Netherlands Bureau for Economic Policy Analysis.
    12. Ron Adner & Daniel Levinthal, 2001. "Demand Heterogeneity and Technology Evolution: Implications for Product and Process Innovation," Management Science, INFORMS, vol. 47(5), pages 611-628, May.
    13. Distante, Roberta & Petrella, Ivan & Santoro, Emiliano, 2018. "Gibrat’s law and quantile regressions: An application to firm growth," Economics Letters, Elsevier, vol. 164(C), pages 5-9.
    14. Micheline Goedhuys & Leo Sleuwaegen, 2010. "High-growth entrepreneurial firms in Africa: a quantile regression approach," Small Business Economics, Springer, vol. 34(1), pages 31-51, January.
    15. Angel Sevil & Alfonso Cruz & Tomas Reyes & Roberto Vassolo, 2022. "When Being Large Is Not an Advantage: How Innovation Impacts the Sustainability of Firm Performance in Natural Resource Industries," Sustainability, MDPI, vol. 14(23), pages 1-20, December.
    16. Unterschultz, James R. & Lerohl, Mel L. & Peng, Yanning & Gurung, Rajendra Kumar, 1998. "A Nutraceutical Industry: Policy Implications for Future Directions," Project Report Series 24051, University of Alberta, Department of Resource Economics and Environmental Sociology.
    17. Bos, Jaap W.B. & Economidou, Claire & Sanders, Mark W.J.L., 2013. "Innovation over the industry life-cycle: Evidence from EU manufacturing," Journal of Economic Behavior & Organization, Elsevier, vol. 86(C), pages 78-91.
    18. de Vaan, Mathijs, 2014. "Interfirm networks in periods of technological turbulence and stability," Research Policy, Elsevier, vol. 43(10), pages 1666-1680.
    19. Daria Ciriaci & Pietro Moncada-Paternò-Castello & Peter Voigt, 2016. "Innovation and job creation: a sustainable relation?," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 6(2), pages 189-213, August.
    20. Mahka Moeen & Rajshree Agarwal & Sonali K. Shah, 2020. "Building Industries by Building Knowledge: Uncertainty Reduction over Industry Milestones," Strategy Science, INFORMS, vol. 5(3), pages 218-244, September.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:jns:jbstat:v:229:y:2009:i:2-3:p:313-326. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Peter Golla (email available below). General contact details of provider: https://www.degruyter.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.