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Innovation and employment: a firm level study of Indian industries

Author

Listed:
  • Arup Mitra
  • Amit Jha

Abstract

This study based on the firm level data for eleven industries for the period ranging from 1998 through 2010 makes an attempt to capture the effect of R&D on employment in the backdrop of the debate on possible tradeoffs between innovation and labour absorption. It also estimates the firm specific time variant total factor productivity growth and technical efficiency and assesses the impact of R&D on these performance indicators. Though the findings are not supportive of a positive relationship between R&D and productivity, the elasticity of employment with respect to R&D is seen to be positive in a number of industries. Even when R&D does not mean actual innovation of technology, it involves processing of byproducts and efforts pursued to bring in an improvement in product quality and efficiency which may be resulting in employment gains. This finding has important policy implications reinforcing the importance of incentives for pursuing R&D on a larger scale. Copyright Eurasia Business and Economics Society 2015

Suggested Citation

  • Arup Mitra & Amit Jha, 2015. "Innovation and employment: a firm level study of Indian industries," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 5(1), pages 45-71, June.
    • Handle: RePEc:spr:eurasi:v:5:y:2015:i:1:p:45-71
    DOI: 10.1007/s40821-015-0015-3
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