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Does Innovation by Firms Still Create Jobs even after the Business Stealing Effect at the Sector Level?

Jisun Lim and Keun Lee

Journal of Economic Policy Reform, 2023, vol. 26, issue 2, 97-125

Abstract: The literature on innovation and employment has not provided theory-consistent results about the question of whether innovation by firms would still create jobs after the canceling out by a negative or business stealing effect and a positive spillover effect at the sector level. This study addresses this issue using Korean firm and sector data over a long-term period. Beyond the consensus results by firm-level analyses, this study also produces the sector-level results confirming the significant and positive long-term effects of product innovation, as well as no significant effects of process innovation, on the net employment growth of a sector.

Date: 2023
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DOI: 10.1080/17487870.2022.2076680

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