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Empirical analysis on the effect of technology innovation on employment in Korean Inno-Biz SMEs

Author

Listed:
  • Beom Cheol Cin

    (Kyonggi University)

  • Hae-young Lee

    (Kangnam University)

  • Jongsung Kim

    (Bryant University)

Abstract

Using Korean panel data sets, this paper analyzes the employment effect of production process technology innovation and new product technology innovation in Korean Inno-Biz SMEs. In the presence of bi-directional causality between technology innovation and employment, the use of OLS can produce biased results when the technology innovation is treated as an exogenous variable. To address this endogeneity problem, this research uses the Two-Stage Residual Inclusion (2SRI) estimation method. It was found that the wage elasticity of employment is higher in the long run than in the short run and the effect of technology innovation on employment is larger in the long run than in the short run. The estimated coefficients for product innovation variable are not statistically significant, while the estimates for process innovation were found to be positive and statistically significant in all models.

Suggested Citation

  • Beom Cheol Cin & Hae-young Lee & Jongsung Kim, 2015. "Empirical analysis on the effect of technology innovation on employment in Korean Inno-Biz SMEs," Economics Bulletin, AccessEcon, vol. 35(4), pages 2258-2269.
    • Handle: RePEc:ebl:ecbull:eb-14-00728
    as

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    References listed on IDEAS

    as
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    6. Peters, Bettina, 2004. "Employment Effects of Different Innovation Activities: Microeconometric Evidence," ZEW Discussion Papers 04-73, ZEW - Leibniz Centre for European Economic Research.
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    More about this item

    Keywords

    Technology innovation; Employment; Inno-Biz SMEs;
    All these keywords.

    JEL classification:

    • J2 - Labor and Demographic Economics - - Demand and Supply of Labor
    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs

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