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

  • Francesco Bogliacino

    (European Commission, Joint Research Center - Institute for Perspective Technological Studies, Sevilla & Centro de Estudios Para America Latina y el Caribe-Universidad EAFIT, Rise Group)

  • Mariacristina Piva


    (Università Cattolica, Milano and Piacenza)

  • Marco Vivarelli


    (Università Cattolica, Milano and Piacenza & SPRU-University of Sussex & IZA, Bonn)

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 Institut d'Economia de Barcelona (IEB) in its series Working Papers with number 2011/20.

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Length: 34 pages
Date of creation: 2011
Date of revision:
Handle: RePEc:ieb:wpaper:2011/9/doc2011-20
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