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Does Innovation Stimulate Employment? A Firm-Level Analysis Using Comparable Micro-Data from Four European Countries

Rupert Harrison, Jordi Jaumandreu (), Jacques Mairesse () and Bettina Peters ()

No 14216, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This paper studies the impact of process and product innovations introduced by firms on employment growth in these firms. A simple model that relates employment growth to process innovations and to the growth of sales separately due to innovative and unchanged products is developed and estimated using comparable firm-level data from France, Germany, Spain and the UK. Results show that displacement effects induced by productivity growth in the production of old products are large, while those associated with process innovations, which are likely to be compensated by price decreases, appear to be small. The effects related to product innovations are, however, strong enough to overcompensate these displacement effects.

JEL-codes: D2 J23 L1 O31 O33 (search for similar items in EconPapers)
Date: 2008-08
New Economics Papers: this item is included in nep-bec, nep-eec, nep-eff, nep-ent, nep-ino, nep-knm and nep-tid
Note: LS PR
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Published as Harrison, Rupert & Jaumandreu, Jordi & Mairesse, Jacques & Peters, Bettina, 2014. "Does innovation stimulate employment? A firm-level analysis using comparable micro-data from four European countries," International Journal of Industrial Organization, Elsevier, Elsevier, vol. 35(C), pages 29-43.

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Journal Article: Does innovation stimulate employment? A firm-level analysis using comparable micro-data from four European countries (2014) Downloads
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