Industrial Innovation, Labour Productivity, Sales and Employment

Geert Woltjer, Michiel van Galen and Katja Logatcheva

International Journal of the Economics of Business, 2021, vol. 28, issue 1, 89-113

Abstract: This article examines the relationship between firm-level innovation and employment growth for industrial firms in the Netherlands. The empirical analysis uses four waves of the CIS survey for the period 2002-2010. It extends the literature by making an explicit split between the expansion effect of innovation and the labour productivity effect. The results show that both product and process innovation increase labour productivity and therefore induce direct reductions in employment. However, these negative employment effects are more than compensated by increases in sales, implying that both process and product innovations increase employment. In this article for the first time the relationship between both product and process innovations and employment is decomposed in a systematic manner based on explicit econometric equations on the relationship between innovation and labour productivity respectively sales. It is argued that the effects for sales and labour productivity are probably underestimated in all research that uses CIS survey data because these do not show the price effects of increased productivity, but that this effect cancels out in the estimated employment equation.

Date: 2021
References: Add references at CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://hdl.handle.net/10.1080/13571516.2019.1695448 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:taf:ijecbs:v:28:y:2021:i:1:p:89-113

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/CIJB20

DOI: 10.1080/13571516.2019.1695448

Access Statistics for this article

International Journal of the Economics of Business is currently edited by Eleanor Morgan

More articles in International Journal of the Economics of Business from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().