Innovation, employment growth, and foreign ownership of firms

Bernhard Dachs and Bettina Peters ()

Research Policy, 2014, vol. 43, issue 1, 214-232

Abstract: This paper examines how foreign-owned and domestically owned firms transform innovation into employment growth. The empirical analysis, based on the model of Harrison et al. (2008) and CIS data for 16 countries, reveals important differences between the two groups: Due to general productivity increases and process innovation, foreign-owned firms experience higher job losses than domestically owned firms. At the same time, employment-creating effects of product innovation are larger for foreign-owned firms. Together with employment-stimulating effects stemming from existing products, they overcompensate the negative displacement effects resulting in net employment growth in foreign-owned firms. However, net employment growth turns out to be smaller in foreign-owned firms than in domestically owned firms.

Keywords: Employment; Innovation; Foreign ownership; Community Innovation Survey; Host country effects (search for similar items in EconPapers)
JEL-codes: F23 O31 O33 (search for similar items in EconPapers)
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (66)

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Related works:
Working Paper: Innovation, employment growth, and foreign ownership of firms: A European perspective (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:respol:v:43:y:2014:i:1:p:214-232

DOI: 10.1016/j.respol.2013.08.001

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