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The Employment Effects of Innovation. Evidence from a Sample of Italian Manufacturing Firms

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Abstract

This paper deals with a controversial question: Can innovation create unemployment? Theoretical frameworks and empirical evidences on that topic provide quite different results, depending on the socio-economic and institutional contest where the innovation is introduced and the type of technological change (process vs. product).In our empirical evidence we used a database with information on sales, investments, R&D, product and process innovation and number of employees of about 3000 Italian manufacturing firms. The database covers the period 1992-94. Employment grows in technological advanced industries with respect to traditional industries. The econometric analysis suggests that there are some differences in the behaviour of firms in different regions of Italy. Firms in North East of Italy have better performances than other firms and medium-small firms increased their employment. In particular high R&D expenditures have a negative impact on employment. Big firms spend more in R&D and lose employees in the three years. Investments oriented to increase productive capacity have a positive impact on employment.

Suggested Citation

  • Marina Di Giacomo, 2000. "The Employment Effects of Innovation. Evidence from a Sample of Italian Manufacturing Firms," CERIS Working Paper 200009, CNR-IRCrES Research Institute on Sustainable Economic Growth - Torino (TO) ITALY - former Institute for Economic Research on Firms and Growth - Moncalieri (TO) ITALY.
    • Handle: RePEc:csc:cerisp:200009
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    More about this item

    JEL classification:

    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms

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