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Employment, Innovation, and Productivity: Evidence from Italian Microdata

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Listed:
  • Bronwyn H. Hall
  • Francesca Lotti
  • Jacques Mairesse
Abstract
Italian manufacturing firms have been losing ground with respect to many of their European competitors. This paper presents some empirical evidence on the effects of innovation on employment growth and therefore on firms' productivity with the goal of understanding the roots of such poor performance. We use firm level data from the last three surveys on Italian manufacturing firms conducted by Mediocredito-Capitalia, which cover the period 1995-2003. Using a slightly modified version of the model proposed by Harrison, Jaumandreu, Mairesse and Peters (HJMP 2005), which separates employment growth rates into those associated with old and new products, we find no evidence of significant employment displacement effects stemming from process innovation. The sources of employment growth during the period are split equally between the net contribution of product innovation and the net contribution from sales growth of old products. However, the contribution of product innovation to employment growth is somewhat lower than in the four European countries considered in HJMP 2005, and the contribution of innovation in general to productivity growth is almost nil in Italy during this period.

Suggested Citation

  • Bronwyn H. Hall & Francesca Lotti & Jacques Mairesse, 2007. "Employment, Innovation, and Productivity: Evidence from Italian Microdata," NBER Working Papers 13296, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:13296
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    References listed on IDEAS

    as
    1. Peters, Bettina, 2004. "Employment Effects of Different Innovation Activities: Microeconometric Evidence," ZEW Discussion Papers 04-73, ZEW - Leibniz Centre for European Economic Research.
    2. Lachenmaier Stefan & Rottmann Horst, 2007. "Employment Effects of Innovation at the Firm Level," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 227(3), pages 254-272, June.
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    16. Brouwer, Erik & Kleinknecht, Alfred & Reijnen, Jeroen O N, 1993. "Employment Growth and Innovation at the Firm Level," Journal of Evolutionary Economics, Springer, vol. 3(2), pages 153-159, May.
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    More about this item

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • J0 - Labor and Demographic Economics - - General
    • J20 - Labor and Demographic Economics - - Demand and Supply of Labor - - - General
    • L20 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - General
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General

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