[go: up one dir, main page]
IDEAS home Printed from https://ideas.repec.org/p/hal/cesptp/halshs-00175042.html
   My bibliography  Save this paper

The employment effects of innovation

Author

Listed:
  • Alex Coad

    (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, Max Planck Institute of Economics - Max-Planck-Gesellschaft)

  • Rekha Rao

    (Max Planck Institute of Economics - Max-Planck-Gesellschaft)

Abstract
The issue of technological unemployment receives perennial popular attention. Although there are previous empirical investigations that have focused on the relationship between innovation and employment, the originality of our approach lies in our choice of method. We focus on four 2-digit manufacturing industries that are known for their high patenting activity. We then use Principal Components Analysis to generate a firm-and year-specific "innovativeness" index by extracting the common variance in a firm's patenting and R&D expenditure histories. To begin with, we explore the heterogeneity of firms by using semi-parametric quantile regression. Whilst some firms may reduce employment levels after innovating, others increase employment. We then move on to a weighted least squares (WLS) analysis, which explicitly takes into account the different job-creating potential of firms of different sizes. As a result, we focus on the effect of innovation on total number of jobs, whereas previous studies have focused on the effect of innovation on firm behavior. Indeed, previous studies have typically taken the firm as the unit of analysis, implicity weighting each firm equally according to the principle of "one firm equals one observation". Our results suggest that firm-level innovative activity leads to employment creation that may have been underestimated in previous studies.

Suggested Citation

  • Alex Coad & Rekha Rao, 2007. "The employment effects of innovation," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00175042, HAL.
    • Handle: RePEc:hal:cesptp:halshs-00175042
    Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-00175042
    as

    Download full text from publisher

    File URL: https://shs.hal.science/halshs-00175042/document
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Cefis, Elena & Orsenigo, Luigi, 2001. "The persistence of innovative activities: A cross-countries and cross-sectors comparative analysis," Research Policy, Elsevier, vol. 30(7), pages 1139-1158, August.
    2. Moshe Buchinsky, 1998. "Recent Advances in Quantile Regression Models: A Practical Guideline for Empirical Research," Journal of Human Resources, University of Wisconsin Press, vol. 33(1), pages 88-126.
    3. Giulio Bottazzi & Angelo Secchi, 2003. "Common Properties and Sectoral Specificities in the Dynamics of U.S. Manufacturing Companies," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 23(3_4), pages 217-232, December.
    4. Bronwyn H. Hall & Adam B. Jaffe & Manuel Trajtenberg, 2001. "The NBER Patent Citation Data File: Lessons, Insights and Methodological Tools," NBER Working Papers 8498, National Bureau of Economic Research, Inc.
    5. Buchinsky, Moshe, 1994. "Changes in the U.S. Wage Structure 1963-1987: Application of Quantile Regression," Econometrica, Econometric Society, vol. 62(2), pages 405-458, March.
    6. Giulio Bottazzi & Alex Coad & Nadia Jacoby & Angelo Secchi, 2011. "Corporate growth and industrial dynamics: evidence from French manufacturing," Applied Economics, Taylor & Francis Journals, vol. 43(1), pages 103-116.
    7. Jacques Mairesse, 2008. "Employment, innovation, and productivity: evidence from Italian microdata," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 17(4), pages 813-839, August.
    8. Arundel, Anthony & Kabla, Isabelle, 1998. "What percentage of innovations are patented? empirical estimates for European firms," Research Policy, Elsevier, vol. 27(2), pages 127-141, June.
    9. Harrison, Rupert & Jaumandreu, Jordi & Mairesse, Jacques & Peters, Bettina, 2005. "Does innovation stimulate employment? A firm-level analysis using comparable micro data on four European countries," MPRA Paper 1245, University Library of Munich, Germany.
    10. Niefert, Michaela, 2005. "Patenting Behaviour and Employment Growth in German Start-up Firms: A Panel Data Analysis," ZEW Discussion Papers 05-03, ZEW - Leibniz Centre for European Economic Research.
    11. Wesley M. Cohen & Richard R. Nelson & John P. Walsh, 2000. "Protecting Their Intellectual Assets: Appropriability Conditions and Why U.S. Manufacturing Firms Patent (or Not)," NBER Working Papers 7552, National Bureau of Economic Research, Inc.
    12. Bronwyn H. Hall, 2005. "Exploring the Patent Explosion," The Journal of Technology Transfer, Springer, vol. 30(2_2), pages 35-48, January.
    13. Hall, Bronwyn H. & Oriani, Raffaele, 2006. "Does the market value R&D investment by European firms? Evidence from a panel of manufacturing firms in France, Germany, and Italy," International Journal of Industrial Organization, Elsevier, vol. 24(5), pages 971-993, September.
    14. Koenker, Roger W & Bassett, Gilbert, Jr, 1978. "Regression Quantiles," Econometrica, Econometric Society, vol. 46(1), pages 33-50, January.
    15. Giovanni Dosi, 2000. "Sources, Procedures, and Microeconomic Effects of Innovation," Chapters, in: Innovation, Organization and Economic Dynamics, chapter 2, pages 63-114, Edward Elgar Publishing.
    16. Evangelista, Rinaldo & Savona, Maria, 2003. "Innovation, employment and skills in services. Firm and sectoral evidence," Structural Change and Economic Dynamics, Elsevier, vol. 14(4), pages 449-474, December.
    17. Nicholas Bloom & John Van Reenen, 2002. "Patents, Real Options and Firm Performance," Economic Journal, Royal Economic Society, vol. 112(478), pages 97-116, March.
    18. Zvi Griliches, 1998. "Patent Statistics as Economic Indicators: A Survey," NBER Chapters, in: R&D and Productivity: The Econometric Evidence, pages 287-343, National Bureau of Economic Research, Inc.
    19. Jean O. Lanjouw & Mark Schankerman, 2004. "Patent Quality and Research Productivity: Measuring Innovation with Multiple Indicators," Economic Journal, Royal Economic Society, vol. 114(495), pages 441-465, April.
    20. repec:fth:harver:1473 is not listed on IDEAS
    21. Klepper, Steven, 1996. "Entry, Exit, Growth, and Innovation over the Product Life Cycle," American Economic Review, American Economic Association, vol. 86(3), pages 562-583, June.
    22. Roger Koenker & Kevin F. Hallock, 2001. "Quantile Regression," Journal of Economic Perspectives, American Economic Association, vol. 15(4), pages 143-156, Fall.
    23. Joao Pedro Azevedo, 2004. "GRQREG: Stata module to graph the coefficients of a quantile regression," Statistical Software Components S437001, Boston College Department of Economics, revised 17 Mar 2011.
    24. Van Reenen, John, 1997. "Employment and Technological Innovation: Evidence from U.K. Manufacturing Firms," Journal of Labor Economics, University of Chicago Press, vol. 15(2), pages 255-284, April.
    25. Alex Coad & Rekha Rao, 2006. "Innovation and market value: a quantile regression analysis," Economics Bulletin, AccessEcon, vol. 15(13), pages 1-10.
    26. C. Greenhalgh & M. Longland & D. Bosworth, 2001. "Technological Activity and Employment in a Panel of UK Firms," Scottish Journal of Political Economy, Scottish Economic Society, vol. 48(3), pages 260-282, August.
    27. Rinaldo Evangelista & Maria Savona, 2002. "The Impact of Innovation on Employment in Services: Evidence from Italy," International Review of Applied Economics, Taylor & Francis Journals, vol. 16(3), pages 309-318.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Swati Mehta, 2016. "Innovation and Employment: A Study of Indian Manufacturing Sector," Millennial Asia, , vol. 7(2), pages 184-206, October.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Alex Coad & Rekha Rao, 2011. "The firm-level employment effects of innovations in high-tech US manufacturing industries," Journal of Evolutionary Economics, Springer, vol. 21(2), pages 255-283, May.
    2. Alexander Coad & Rekha Rao, 2007. "The Employment Effects of Innovations in High-Tech Industries," Papers on Economics and Evolution 2007-05, Philipps University Marburg, Department of Geography.
    3. Coad, Alex & Rao, Rekha, 2008. "Innovation and firm growth in high-tech sectors: A quantile regression approach," Research Policy, Elsevier, vol. 37(4), pages 633-648, May.
    4. Alex Coad & Rekha Rao, 2006. "Innovation and firm growth in "complex technology" sectors: a quantile regression approach," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00118797, HAL.
    5. Alex Coad, 2007. "Firm Growth: a Survey," Post-Print halshs-00155762, HAL.
    6. repec:ebl:ecbull:v:15:y:2006:i:13:p:1-10 is not listed on IDEAS
    7. Alex Coad & Rekha Rao, 2006. "As luck would have it: innovation and market value in "complex technology" sectors [Innovation et valeur boursière dans les secteurs de " technologies complexes "]," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00119062, HAL.
    8. Daria Ciriaci & Pietro Moncada-Paternò-Castello & Peter Voigt, 2016. "Innovation and job creation: a sustainable relation?," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 6(2), pages 189-213, August.
    9. Alex Coad, 2008. "Distance to Frontier and Appropriate Business Strategy," LEM Papers Series 2008/13, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
    10. Alex Coad & Rekha Rao, 2006. "Innovation and market value: a quantile regression analysis," Economics Bulletin, AccessEcon, vol. 15(13), pages 1-10.
    11. Vincent Van Roy & Daniel Vertesy & Marco Vivarelli, 2015. "The Employment Impact of Innovation: Evidence from European Patenting Companies," DISCE - Quaderni del Dipartimento di Politica Economica ispe0075, Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE).
    12. Marco Capasso & Tania Treibich & Bart Verspagen, 2015. "The medium-term effect of R&D on firm growth," Small Business Economics, Springer, vol. 45(1), pages 39-62, June.
    13. Van Roy, Vincent & Vértesy, Dániel & Vivarelli, Marco, 2018. "Technology and employment: Mass unemployment or job creation? Empirical evidence from European patenting firms," Research Policy, Elsevier, vol. 47(9), pages 1762-1776.
    14. Alex Coad & Rekha Rao, 2010. "Firm growth and R&D expenditure," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 19(2), pages 127-145.
    15. Van Roy, Vincent & Vertesy, Daniel & Vivarelli, Marco, 2015. "Innovation and Employment in Patenting Firms: Empirical Evidence from Europe," IZA Discussion Papers 9147, Institute of Labor Economics (IZA).
    16. Giovanni Dosi & Jean-Luc Gaffard & Lionel Nesta, 2008. "Schumpeterian themes on industrial evolution, structural change and their microfoundations: an introduction," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 17(4), pages 601-609, August.
    17. Riccardo Leoncini & Alberto Marzucchi & Sandro Montresor & Francesco Rentocchini & Ugo Rizzo, 2019. "‘Better late than never’: the interplay between green technology and age for firm growth," Small Business Economics, Springer, vol. 52(4), pages 891-904, April.
    18. Daria Ciriaci & Pietro Moncada-Paternò-Castello & Peter Voigt, 2012. "Does size or age of innovative firms affect their growth persistence? -Evidence from a panel of innovative Spanish firms-," JRC Working Papers on Corporate R&D and Innovation 2012-03, Joint Research Centre.
    19. Falk Martin, 2015. "Employment Effects of Technological and Organizational Innovations: Evidence Based on Linked Firm-Level Data for Austria," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 235(3), pages 268-285, June.
    20. Bedford, Anna & Ma, Le & Ma, Nelson & Vojvoda, Kristina, 2022. "Australian innovation: Patent database construction and first evidence," Pacific-Basin Finance Journal, Elsevier, vol. 73(C).
    21. Micheline Goedhuys & Leo Sleuwaegen, 2010. "High-growth entrepreneurial firms in Africa: a quantile regression approach," Small Business Economics, Springer, vol. 34(1), pages 31-51, January.

    More about this item

    Keywords

    Technological unemployment; innovation; firm growth; Weighted Least Squares; aggregation; quantile regression; Chômage technologique; croissance des firmes; régression par quantile;
    All these keywords.

    JEL classification:

    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • J01 - Labor and Demographic Economics - - General - - - Labor Economics: General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hal:cesptp:halshs-00175042. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: CCSD (email available below). General contact details of provider: https://hal.archives-ouvertes.fr/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.