Employment effect of innovation under different market structures: Findings from Korean manufacturing firms

Jisun Lim and Keun Lee ()

Technological Forecasting and Social Change, 2019, vol. 146, issue C, 606-615

Abstract: This research provides empirical evidence on the employment effect of both process and product innovations under different market structures, using data from 1999 to 2009 on 11,369 manufacturing firms in Korea. Consistent to the literature, it first finds that the overall employment effect of innovations is positive, since process innovations do not have any significant effect but product innovations have positive and significant effects on employment. Then, our contribution is to estimate the employment effect of innovations in different market structure by adding interaction terms between proxies for market structure and each type of innovation. We find that process innovation has a greater negative effect in more monopolistic markets, and confirm no significant differences in the employment effect of product innovations across different market structure. Overall, we show that innovations have different effects on employment across different market structures, which implies that a competitive market is important for increasing employment through innovation.

Keywords: Product innovation; Process innovation; Employment; Market structure; Korean firms; Empirical analysis (search for similar items in EconPapers)
JEL-codes: C26 J23 L12 O31 O57 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (15)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:tefoso:v:146:y:2019:i:c:p:606-615

DOI: 10.1016/j.techfore.2018.04.022

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