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The impact of innovation activities on employment in the environmental sector : empirical results for Germany at the firm level

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  • Horbach, Jens

Abstract

"The paper explores employment effects of environmental product innovations at the firm level. The empirical analysis is based on the establishment panel of the Institute for Employment Research (Nuremberg). A descriptive analysis shows that more than 50% of the firms in the environmental sector developed new products or improved existing products or services. The most dynamic environmental fields were analytics, consulting, measurement technology, waste disposal and recycling. A firm specialised in environmental research and development seems to have the best employment perspectives in the short and in the long run. Our econometric analysis had to address a simultaneity problem because the decision of a firm on the realisation of innovations and on the enlargement or reduction of employment is mutually dependant. Therefore, we apply a bivariate probit model that allows estimating the two variables simultaneously. The econometric results show that the influence of environmental innovation activities on the employment development is significantly positive. Furthermore, the quantitative importance of the new products with regard to the whole turnover of the firm is also important for employment growth. Within the bivariate probit model, the determinants of environmental innovation activities are also explored. They may be interpreted as indirect influences on the employment development of the firm. The results show that the improvement of the innovative capacities by R&D and further education measures and the existence of a high qualified human capital are significantly important for the development of new products in the environmental sector. A good strategy to improve the innovativeness of a firm seems to be a diversification of environmental product lines offered by the firm." (Author's abstract, IAB-Doku) ((en))

Suggested Citation

  • Horbach, Jens, 2008. "The impact of innovation activities on employment in the environmental sector : empirical results for Germany at the firm level," IAB-Discussion Paper 200816, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    • Handle: RePEc:iab:iabdpa:200816
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    References listed on IDEAS

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    1. Werner Smolny, 1998. "Innovations, Prices and Employment: A Theoretical Model and an Empirical Application for West German Manufacturing Firms," Journal of Industrial Economics, Wiley Blackwell, vol. 46(3), pages 359-381, September.
    2. Van Reenen, John, 1997. "Employment and Technological Innovation: Evidence from U.K. Manufacturing Firms," Journal of Labor Economics, University of Chicago Press, vol. 15(2), pages 255-284, April.
    3. Harabi, Najib, 2000. "Employment Effects of Ecological Innovations: An Empirical Analysis," MPRA Paper 4395, University Library of Munich, Germany.
    4. Nathalie Greenan & Dominique Guellec, 2000. "Technological Innovation and Employment Reallocation," LABOUR, CEIS, vol. 14(4), pages 547-590, December.
    5. Frondel, Manuel & Horbach, Jens & Rennings, Klaus, 2008. "What triggers environmental management and innovation? Empirical evidence for Germany," Ecological Economics, Elsevier, vol. 66(1), pages 153-160, May.
    6. Jens Horbach, 2003. "Employment and Innovations in the Environmental Sector: Determinants and Econometrical Results for Germany," Working Papers 2003.47, Fondazione Eni Enrico Mattei.
    7. Smolny, Werner, 1998. "Innovations, Prices and Employment: A Theoretical Model and an Empirical Application for West German Manufacturing Firms," Journal of Industrial Economics, Wiley Blackwell, vol. 46(3), pages 359-381, September.
    8. Tommaso Antonucci & Mario Pianta, 2002. "Employment Effects of Product and Process Innovation in Europe," International Review of Applied Economics, Taylor & Francis Journals, vol. 16(3), pages 295-307.
    9. Peters, Bettina, 2004. "Employment Effects of Different Innovation Activities: Microeconometric Evidence," ZEW Discussion Papers 04-73, ZEW - Leibniz Centre for European Economic Research.
    10. Friedhelm Pfeiffer & Klaus Rennings, 2001. "Employment impacts of cleaner production – evidence from a German study using case studies and surveys," Business Strategy and the Environment, Wiley Blackwell, vol. 10(3), pages 161-175, May.
    11. Klaus Rennings & Thomas Zwick, 2002. "Employment Impact Of Cleaner Production On The Firm Level: Empirical Evidence From A Survey In Five European Countries," International Journal of Innovation Management (ijim), World Scientific Publishing Co. Pte. Ltd., vol. 6(03), pages 319-342.
    12. Werner Smolny, 2002. "Employment Adjustment at the Firm Level. A Theoretical Model and an Empirical Investigation for West German Manufacturing Firms," LABOUR, CEIS, vol. 16(1), pages 65-88, March.
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    Cited by:

    1. Stracke, Stefan & Nerdinger, Friedemann W., 2009. "Alles unter einen Hut bringen? Rollen und Rollenkonflikte von Betriebsräten bei betrieblicher Innovatiion," Rostocker Beiträge zur Wirtschafts- und Organisationspsychologie 3, Universität Rostock, Seniorprofessur für Wirtschafts- und Organisationspsychologie.
    2. Georg Licht & Bettina Peters, 2014. "Do Green Innovations Stimulate Employment? Firm-level Evidence From Germany. WWWforEurope Working Paper No. 53," WIFO Studies, WIFO, number 47155, April.
    3. Bettina Peters & Georg Licht, 2014. "The Impact of Environmental Innovation on Employment Growth in Europe," ERSA conference papers ersa14p1542, European Regional Science Association.
    4. Daniela Kletzan-Slamanig & Angela Köppl, 2009. "Österreichische Umwelttechnikindustrie: Entwicklung – Schwerpunkte – Innovationen," WIFO Monatsberichte (monthly reports), WIFO, vol. 82(7), pages 539-554, July.
    5. Georg Licht & Bettina Peters, 2013. "The Impact of Green Innovation on Employment Growth in Europe. WWWforEurope Working Paper No. 50," WIFO Studies, WIFO, number 47094, April.

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    More about this item

    Keywords

    Bundesrepublik Deutschland ; Beschäftigungseffekte ; Forschung und Entwicklung ; Forschungsaufwand ; Abfallbeseitigung ; IAB-Betriebspanel ; Innovationsfähigkeit ; Produktinnovation ; Recycling ; Technik ; Umweltberatung ; Umweltforschung ; Umweltschutzindustrie ; Umwelttechnik ; Umweltverträglichkeit ; 2004-2005;
    All these keywords.

    JEL classification:

    • C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions; Probabilities
    • J49 - Labor and Demographic Economics - - Particular Labor Markets - - - Other
    • Q52 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Pollution Control Adoption and Costs; Distributional Effects; Employment Effects
    • Q55 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Technological Innovation

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