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

Author

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

Abstract

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.

Suggested Citation

  • Harrison, Rupert & Jaumandreu, Jordi & Mairesse, Jacques & Peters, Bettina, 2005. "Does innovation stimulate employment? A firm-level analysis using comparable micro data on four European countries," MPRA Paper 1245, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:1245
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    File URL: https://mpra.ub.uni-muenchen.de/1245/1/MPRA_paper_1245.pdf
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Alexander Coad & Rekha Rao, 2007. "The Employment Effects of Innovations in High-Tech Industries," Papers on Economics and Evolution 2007-05, Philipps University Marburg, Department of Geography.
    2. Jacques Mairesse, 2008. "Employment, innovation, and productivity: evidence from Italian microdata," Industrial and Corporate Change, Oxford University Press, vol. 17(4), pages 813-839, August.
    3. Siri Terjesen & László Szerb, 2008. "Dice thrown from the beginning? An empirical investigation of determinants of firm level growth expectations," Estudios de Economia, University of Chile, Department of Economics, vol. 35(2 Year 20), pages 153-178, December.
    4. Alex Coad & Werner Hölzl, 2012. "Firm Growth: Empirical Analysis," Chapters,in: Handbook on the Economics and Theory of the Firm, chapter 24 Edward Elgar Publishing.
    5. Lachenmaier, Stefan & Rottmann, Horst, 2011. "Effects of innovation on employment: A dynamic panel analysis," International Journal of Industrial Organization, Elsevier, vol. 29(2), pages 210-220, March.
    6. Micheline Goedhuys & Leo Sleuwaegen, 2010. "High-growth entrepreneurial firms in Africa: a quantile regression approach," Small Business Economics, Springer, vol. 34(1), pages 31-51, January.
    7. Giovanni Dosi & Jean-Luc Gaffard & Lionel Nesta, 2008. "Schumpeterian themes on industrial evolution, structural change and their microfoundations: an introduction," Industrial and Corporate Change, Oxford University Press, vol. 17(4), pages 601-609, August.
    8. Peters, Bettina, 2004. "Employment Effects of Different Innovation Activities: Microeconometric Evidence," ZEW Discussion Papers 04-73, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    9. Alex Coad & Rekha Rao, 2011. "The firm-level employment effects of innovations in high-tech US manufacturing industries," Journal of Evolutionary Economics, Springer, vol. 21(2), pages 255-283, May.
    10. Damijan, Jože P. & Kostevc, Črt & Rojec, Matija, 2012. "Does innovation help the good or the poor performing firms?," Economics Letters, Elsevier, vol. 115(2), pages 190-195.
    11. Lionel Nesta, 2010. "Commentaire : Désindustrialisation ou mutation industrielle ?," Économie et Statistique, Programme National Persée, vol. 438(1), pages 297-301.
    12. Matthias Buerger & Tom Broekel & Alex Coad, 2012. "Regional Dynamics of Innovation: Investigating the Co-evolution of Patents, Research and Development (R&D), and Employment," Regional Studies, Taylor & Francis Journals, vol. 46(5), pages 565-582, August.

    More about this item

    Keywords

    process innovations; product innovations; employment; growth;

    JEL classification:

    • L20 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - General

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