Empirical analysis on the effect of technology innovation on employment in Korean Inno-Biz SMEs

Beom Cheol Cin (), Hae-young Lee () and Jongsung Kim ()
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Beom Cheol Cin: Kyonggi University
Hae-young Lee: Kangnam University
Jongsung Kim: Bryant University

Economics Bulletin, 2015, vol. 35, issue 4, 2258-2269

Abstract: Using Korean panel data sets, this paper analyzes the employment effect of production process technology innovation and new product technology innovation in Korean Inno-Biz SMEs. In the presence of bi-directional causality between technology innovation and employment, the use of OLS can produce biased results when the technology innovation is treated as an exogenous variable. To address this endogeneity problem, this research uses the Two-Stage Residual Inclusion (2SRI) estimation method. It was found that the wage elasticity of employment is higher in the long run than in the short run and the effect of technology innovation on employment is larger in the long run than in the short run. The estimated coefficients for product innovation variable are not statistically significant, while the estimates for process innovation were found to be positive and statistically significant in all models.

Keywords: Technology innovation; Employment; Inno-Biz SMEs (search for similar items in EconPapers)
JEL-codes: J2 J3 (search for similar items in EconPapers)
Date: 2015-10-16
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