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Does innovation stimulate employment? A firm-level analysis using comparable micro data on four European countries

  • Harrison, Rupert
  • Jaumandreu, Jordi
  • Mairesse, Jacques
  • Peters, Bettina

This paper studies the impact of process and product innovations introduced by firms on their employment growth. A model that relates employment growth to process innova- tions and to the growth of sales due to innovative and unchanged products is derived and estimated using a unique source of comparable firm-level data from France, Germany, Spain and the UK. Results for manufacturing show that, although process innovation tends to displace employment, compensation e ffects are prevalent, and product innova- tion is associated with employment growth. In the service sector there is less evidence of displacement e ffects, and growth in sales of new products accounts for a non-negligible proportion of employment growth. Overall the results are similar across countries, with some interesting exceptions.

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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 1245.

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Date of creation: 2005
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Handle: RePEc:pra:mprapa:1245
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Web page: http://mpra.ub.uni-muenchen.de

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  1. Vivarelli, Marco, 2007. "Innovation and Employment: A Survey," IZA Discussion Papers 2621, Institute for the Study of Labor (IZA).
  2. Blechinger, Doris & Kleinknecht, Alfred & Licht, Georg & Pfeiffer, Friedhelm, 1998. "The impact of innovation on employment in Europe: An analysis using CIS data," ZEW Dokumentationen 98-02, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  3. Hall, Bronwyn H. & Mairesse, Jacques, 1995. "Exploring the relationship between R&D and productivity in French manufacturing firms," Journal of Econometrics, Elsevier, vol. 65(1), pages 263-293, January.
  4. Eli Berman & John Bound & Zvi Griliches, 1993. "Changes in the Demand for Skilled Labor within U.S. Manufacturing Industries: Evidence from the Annual Survey of Manufacturing," NBER Working Papers 4255, National Bureau of Economic Research, Inc.
  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 153-59, May.
  6. Peters, Bettina, 2005. "Employment Effects of Different Innovation Activities: Microeconometric Evidence," ZEW Discussion Papers 04-73 [rev.], ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  7. Stephen Machin & John Van Reenen, 1998. "Technology And Changes In Skill Structure: Evidence From Seven Oecd Countries," The Quarterly Journal of Economics, MIT Press, vol. 113(4), pages 1215-1244, November.
  8. Rachel Griffith & Elena Huergo & Jacques Mairesse & Bettina Peters, 2006. "Innovation and Productivity Across Four European Countries," Oxford Review of Economic Policy, Oxford University Press, vol. 22(4), pages 483-498, Winter.
  9. Nickell, Stephen, 1999. "Product markets and labour markets1," Labour Economics, Elsevier, vol. 6(1), pages 1-20, March.
  10. Garcia, Angel & Jaumandreu, Jordi & Rodriguez, Cesar, 2004. "Innovation and jobs: evidence from manufacturing firms," MPRA Paper 1204, University Library of Munich, Germany.
  11. Huergo, Elena & Jaumandreu, Jordi, 2004. "Firms' age, process innovation and productivity growth," International Journal of Industrial Organization, Elsevier, vol. 22(4), pages 541-559, April.
  12. Rinaldo Evangelista, 2000. "Sectoral Patterns Of Technological Change In Services," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 9(3), pages 183-222.
  13. 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 255-84, April.
  14. David Blanchflower & Simon Burgess, 1996. "New Technology and Jobs: Comparative Evidence from a Two Country Study," CEP Discussion Papers dp0285, Centre for Economic Performance, LSE.
  15. repec:ner:tilbur:urn:nbn:nl:ui:12-5662246 is not listed on IDEAS
  16. Nickell, S. & Komg, P., 1989. "Technical Progress And Jobs," Papers 366, London School of Economics - Centre for Labour Economics.
  17. Doms, Mark & Dunne, Timothy & Roberts, Mark J., 1995. "The role of technology use in the survival and growth of manufacturing plants," International Journal of Industrial Organization, Elsevier, vol. 13(4), pages 523-542, December.
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