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Innovation and Employment: Evidence from Italian Microdata

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  • Piva, Mariacristina

    () (Università Cattolica del Sacro Cuore)

  • Vivarelli, Marco

    () (Università Cattolica del Sacro Cuore)

Abstract

The microeconomic empirical literature devoted to the link between innovation and employment tends to suggest that technological change has a positive effect on jobs, at least at the level of the firm. The main purpose of this paper is to see whether this result still holds in a situation where intermediate technologies are implemented mainly through gross innovative investments, as in Italian manufacturing. Applying GMM-SYS to an employment equation augmented for technology and using a unique longitudinal dataset of 575 Italian manufacturing firms over the period 1992-1997, this paper finds a significant - although small in size - positive relationship between innovation and employment. While the links with sales and wages have the expected signs and turn out to be significant, the job creating impact of innovation proves robust after checking for time, industry, firm's size and geographical fixed effects.

Suggested Citation

  • Piva, Mariacristina & Vivarelli, Marco, 2003. "Innovation and Employment: Evidence from Italian Microdata," IZA Discussion Papers 730, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp730
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    References listed on IDEAS

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    1. 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.
    2. Zvi Griliches & Jacques Mairesse, 1995. "Production Functions: The Search for Identification," NBER Working Papers 5067, National Bureau of Economic Research, Inc.
    3. David Blanchflower & Simon Burgess, 1998. "New Technology And Jobs: Comparative Evidence From A Two Country Study," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 5(2-4), pages 109-138.
    4. Richard Blundell & Stephen Bond, 2000. "GMM Estimation with persistent panel data: an application to production functions," Econometric Reviews, Taylor & Francis Journals, vol. 19(3), pages 321-340.
    5. Brouwer, Erik & Kleinknecht, Alfred & Reijnen, Jeroen O N, 1993. "Employment Growth and Innovation at the Firm Level," Journal of Evolutionary Economics, Springer, vol. 3(2), pages 153-159, May.
    6. Manuel Arellano & Stephen Bond, 1991. "Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations," Review of Economic Studies, Oxford University Press, vol. 58(2), pages 277-297.
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    More about this item

    Keywords

    Italian manufacturing; employment; technology; GMM-SYS;

    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

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