Technological catching-up, sales dynamics and employment growth: evidence from China's manufacturing firms
Giovanni Dosi and
Xiaodan Yu
LEM Papers Series from Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy
Abstract:
This paper investigates the microeconomics of employment dynamics, using a Chinese manufacturing firm-level dataset over the period 1998-2007. It does so in the light of a scheme of "circular and cumulative causation", whereby firms' heterogeneous productivity gains and sales dynamics, and innovation activities ultimately shape the patterns of employment dynamics. Using firm's productivity growth as a proxy for process innovation, our results show that the latter correlates negatively with firm-level employment growth. Conversely, relative productivity levels, as such a general proxy for the broad technological advantages/disadvantages of each firm, do show positive effect on employment growth in the long-run through replicator-type dynamics. Moreover, firm-level demand dynamics play a significant role in driving employment growth, which more than compensate the labour-saving effect due to technological progress. Finally, and somewhat puzzlingly, the direct effects of product innovation and patenting activities on employment growth appear to be negligible.
Keywords: Employment Growth; Demand; Product Innovation; Process Innovation; Export; China catching-up (search for similar items in EconPapers)
Date: 2017-10-24
New Economics Papers: this item is included in nep-bec, nep-cna, nep-cse, nep-eff, nep-ino, nep-tid and nep-tra
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Working Paper: Technological catching-up, sales dynamics and employment growth: evidence from China’s manufacturing firms (2018) 
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Persistent link: https://EconPapers.repec.org/RePEc:ssa:lemwps:2017/27
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