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The Impact of Innovation on Employment in Small and Medium Enterprises with Different Growth Rates

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  • Zimmermann, Volker

Abstract

This article examines the impact of innovation on employment growth in innovating small and medium enterprises using a quantile regression approach. The key findings are that innovation has a positive effect on employment in both growing and shrinking firms. The impact of innovation on employee headcounts is much stronger in companies that are already experiencing strong growth than in their slower growing or shrinking counterparts. Thus, positive employment effects of innovations are not restricted to narrow segments of the economy. Economic policy aimed at bolstering the innovative strength of firms is thus a strong encouragement to employment on a broad basis.

Suggested Citation

  • Zimmermann, Volker, 2008. "The Impact of Innovation on Employment in Small and Medium Enterprises with Different Growth Rates," ZEW Discussion Papers 08-134, ZEW - Leibniz Centre for European Economic Research.
    • Handle: RePEc:zbw:zewdip:7524
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    References listed on IDEAS

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    1. Utterback, James M & Abernathy, William J, 1975. "A dynamic model of process and product innovation," Omega, Elsevier, vol. 3(6), pages 639-656, December.
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    Cited by:

    1. Alexander Kaufmann, 2015. "Die Entwicklung von Innovation und Beschäftigung in Österreichs Branchen zwischen 2006 und 2012," Wirtschaft und Gesellschaft - WuG, Kammer für Arbeiter und Angestellte für Wien, Abteilung Wirtschaftswissenschaft und Statistik, vol. 41(3), pages 359-381.
    2. Ibrahim Alnafrah & Sulaiman Mouselli, 2020. "The Role of National Innovation Systems in Entrepreneurship Activities at Baltic State Countries," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 11(1), pages 84-102, March.

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    More about this item

    Keywords

    Labour demand; innovation; small and medium enterprises;
    All these keywords.

    JEL classification:

    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models

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