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Employment, innovation, and interfirm networks

Andrea Fabrizi (), Giuseppe Garofalo (), Giulio Guarini () and Valentina Meliciani ()
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Andrea Fabrizi: Presidenza del Consiglio dei Ministri Rome
Giuseppe Garofalo: Tuscia University Viterbo
Giulio Guarini: Tuscia University Viterbo
Valentina Meliciani: Luiss Guido Carli Rome

PSL Quarterly Review, 2020, vol. 73, issue 293, 161-180

Abstract: This paper studies the employment impact of business network agreements, an innovative policy instrument introduced in Italy in 2010 to stimulate interfirm cooperation, with the aim of increasing innovative capacity and market competitiveness. We estimate the impact of these networks on employment for a panel of Italian firms using a system generalized method of moments and considering the literature on the employment impact of innovation. We find that networks, which can be interpreted as a form of open innovation, have a positive impact on employment; moreover, this impact appears positively influenced by sectoral and regional heterogeneity of firms and the region?s innovation capacities. Overall, the results suggest that participation in networks where firms share industrial, commercial, and technical knowledge improves firm performance, creating synergies that help firms, especially small and medium-sized enterprises, to manage the growing complexity of knowledge and the fierce competition arising from increasingly globalized markets.

Keywords: interfirm networks; employment; innovation; GMM system (search for similar items in EconPapers)
JEL-codes: D85 J2 O36 (search for similar items in EconPapers)
Date: 2020
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