Employment Effects of Innovation at the Firm Level

Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik) 02/2007; 227(3):254-272.
Source: RePEc

ABSTRACT This paper analyzes empirically the effects of innovation on employment at the firm level using a uniquely long panel dataset of German manufacturing firms. The overall effect of innovations on employment often remains unclear in theoretical contributions due to reverse effects. We distinguish between product and process innovations and additionally introduce different innovation categories. We find clearly positive effects for product and process innovations on employment growth with the effects for process innovations being slighthly higher. For product innovations that involved patent applications we can identify an additional positive effect on employment.

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Available from: Stefan Lachenmaier, Sep 27, 2015
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    • "Approaching employment dynamics from the side of industrial organization, a stylized fact can be seen in the negative interrelation between employment growth and plant age (Evans, 1987, Caves, 1998, or Hart, 2000). Another decisive impact comes from a plant's innovation activities (Audretsch/Dohse, 2007, Lachenmaier/Rottmann, 2007). "
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    ABSTRACT: Empirical research on agglomeration and regional economic growth puts high emphasis on the impact of specialization, diversity, and competition on regional employment dynamics (Glaeser et al. 1992, Henderson et al. 1995, Blien et al. 2006, Fuchs 2009). However, Beugelsdijk (2006) and Raspe/van Oort (2008) argue that this relationship should most profoundly hold at the micro or firm level. This paper centres on the labour demand of individual plants and assesses the influence of regional features in direct contrast to plant-specific characteristics as well as conventional labour-demand determinants. Hence, it contributes to the sparse literature on the importance of regional character-istics for firm performance and additionally integrates research from industrial as well as labour economics. The analysis is based on the IAB Establishment Panel, a comprehensive data set on German plants. For the years from 2004 to 2008 it encompasses observations on roughly 8,000 plants. The regional variables are added on the NUTS3-level. First econometric results confirm the basic hypotheses derived from labour-demand theory: wages exert a significantly negative and output a positive influence on the number of employees. Among the plant-specific characteristics, it is mainly plant size, exporting behaviour and R&D / innovation activities that foster employment. There are also distinctive differences regarding the single sectors. Last but not least, the regional environment plays a decisive role for plant-level labour demand. The size of the region the plant is located in, the degree of sectoral concentration as well as of competition within a sector have a positive and highly significant impact. By contrast, accessibility to highways, specialization, and diversity seem to be of minor relevance
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    ABSTRACT: In the late 1980s scholars of technological change were concerned about measuring more aspects of innovation than the mere information contained in the R&D surveys. They sat down under the auspices of the Organization of Economic Co-operation and Development (OECD) and wrote the so-called Oslo manual, which set out the guidelines for a new type of survey, the innovation survey (OECD, 1992). In the EU countries under the coordination of Eurostat, the statistical office of the European Union, a common core questionnaire was agreed upon and surveys were launched under the acronym of CIS (Community Innovation Surveys). These surveys have been repeated every four years. Up to now there exist four waves of CIS (CIS 1 for 1990-1992, CIS 2 for 1994-1996, CIS 3 for 1998-2000, and CIS 4 for 2002-2004). Similar surveys have been conducted in other countries, including emerging, transition and developing countries. In total, over 50 countries have carried out at least one innovation survey. The innovation surveys provide us with three broad groups of measures: innovation inputs, innovation outputs, and modalities of innovation. The innovation inputs encompass besides R&D, other expenditures related to innovation such as acquisitions of patents and licenses, product design, training of personnel, trial production, and market analysis. Four types of innovation outputs are distinguished in the latest version of CIS, namely the introduction of new products (which can be new to the firm or new to the market), the introduction of new processes, organizational changes and marketing innovations. Whereas patents and bibliometrics measure the technical, scientific, inventive side of innovation, the innovation output measures contained in the innovation surveys measure the development, the implementation, and the market introduction of new ideas, namely they measure the introduction on the market of new products or services and the introduction of new ways of organizing production and distribution. The modalities of innovation are the sources of information that lead to an innovation, the effects or innovation or the reasons for innovating, the perceived obstacles to innovation, the perceived strength of various appropriability mechanisms, and the cooperation in research and innovation. The innovation surveys serve two purposes. First and foremost, they are used by policy makers to monitor innovation and benchmark innovation performance. Their second utility is to provide statistical data to researchers in the economics of technological change in order to determine the reasons for innovating and the effects of innovation on economic performance. We shall discuss these two aspects with some illustrations of the usefulness of these data and a discussion of some of their limitations. Presented at GLOBELICS 2009, 7th International Conference, 6-8 October, Dakar, Senegal. Parallel session 3: Measuring innovation: surveys and indicators
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