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The impact of R&D on employment in Europe: A firm-level analysis

  • Francesco Bogliacino


    (Amsterdam Institute for Advanced Labour Studies)

  • Mariacristina Piva


    (DISCE, Università Cattolica del Sacro Cuore)

  • Marco Vivarelli


    (DISCE, Università Cattolica del Sacro Cuore)

The aim of this paper is to test the employment effect of business R&D expenditures, using a unique longitudinal database covering 677 European manufacturing and service firms over the period 1990-2008. Main result from the whole sample dynamic LSDVC (Least Squared Dummy Variable Corrected) estimate is the labour-friendly nature of companies’ R&D, the coefficient of which turns out to be statistically significant, although not very large in magnitude. However, the positive and significant job creation effect of R&D expenditures is detectable in services and high-tech manufacturing but absent in the more traditional manufacturing sectors. This means that we should not expect positive employment effects from increasing R&D in the majority of industrial sectors. This evidence should be kept in mind by European innovation policy makers having employment as one of their specific aims.

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Paper provided by Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE) in its series DISCE - Quaderni del Dipartimento di Scienze Economiche e Sociali with number dises1176.

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Date of creation: Oct 2011
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Handle: RePEc:ctc:serie2:dises1176
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