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Innovation and Employment: A firm level analysis with European R&D Scoreboard data

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Abstract

In this article, we analyse the microeconomic relationship between innovation and employment, using company data from R&D Scoreboard for Europe covering 2000-2008. We estimate a reduced form equation in which R&D can account for both product and process innovation. The existence of non constant elasticities is assessed, due to the combination of efficient scale and decreasing return to R&D: in our empirical estimates the scale effect tends to prevail for a given R&D intensity generating an increasing relationship between total turnover and employment. Our results have important implications for policymakers: R&D and innovation supporting policies should be correctly tailored and monitored since the results depend on the characteristics of the firms benefited. By the same token, calibration of general equilibrium models aimed at quantifying the employment impact of R&D and innovation policies should take into account that the average elasticity can be a very rough approximation. We claim that our results support the position that R&D and innovation policies should be tailored towards favouring entry by knowledge intensive firms, instead of supporting existing actors.

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  • Francesco Bogliacino, 2010. "Innovation and Employment: A firm level analysis with European R&D Scoreboard data," JRC Working Papers on Corporate R&D and Innovation 2010-08, Joint Research Centre.
    • Handle: RePEc:ipt:wpaper:201008
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    1. Francesco Bogliacino & Marco Vivarelli, 2012. "The Job Creation Effect Of R&D Expenditures," Australian Economic Papers, Wiley Blackwell, vol. 51(2), pages 96-113, June.
    2. Bogliacino, Francesco & Pianta, Mario, 2010. "Innovation and Employment: a Reinvestigation using Revised Pavitt classes," Research Policy, Elsevier, vol. 39(6), pages 799-809, July.
    3. Roberto Antonietti, 2007. "Opening the "Skill-Biased Technological Change" Black Box: A Look at the Microfoundations of the Technology-Skill Relationship," Economia politica, Società editrice il Mulino, issue 3, pages 451-476.
    4. 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.
    5. Francesco Bogliacino & Marco Vivarelli, 2012. "The Job Creation Effect Of R&D Expenditures," Australian Economic Papers, Wiley Blackwell, vol. 51(2), pages 96-113, June.
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    More about this item

    Keywords

    Technological change; corporate R&D; employment; panel data;
    All these keywords.

    JEL classification:

    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • J20 - Labor and Demographic Economics - - Demand and Supply of Labor - - - General

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