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Do young innovative companies create more jobs? Evidence from Pakistani textile firms

Waqar Wadho (), Micheline Goedhuys () and Azam Chaudry ()
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Azam Chaudry: Lahore School of Economics

Authors registered in the RePEc Author Service: Azam Chaudhry

No 2, MERIT Working Papers from United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT)

Abstract: Using unique innovation survey data collected among a homogenous sample of firms active in the textiles and apparel sector in Pakistan, this paper analyses the role of innovation for employment growth. In particular, it develops and tests the hypothesis that innovation is conducive to employment creation, and that this is especially the case for smaller and younger firms, supporting the hypothesis that young innovative companies grow faster by engaging in riskier and more radical innovation to catch up with incumbent firms. We find empirical evidence for these hypotheses, which is robust to different model specifications and estimation techniques and to different measures of innovation. Young innovative companies also perform well in absolute employment creation making them interesting from a policy perspective.

Keywords: Technological innovation; Firm growth; Employment growth; Quantile regression; Textiles; Pakistan (search for similar items in EconPapers)
JEL-codes: L25 L26 L67 O30 O53 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ent, nep-ind, nep-sbm and nep-tid
Date: 2019-01-11
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Persistent link: https://EconPapers.repec.org/RePEc:unm:unumer:2019002

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