Innovation and employment: A firm level analysis with European R&D Scoreboard data

This article analyzes the microeconomic relation between innovation and employment, using company data from R&D Scoreboard for Europe covering 2000–2008. A reduced form equation in which R&D can account for both product and process innovation is estimated. The existence of non-constant elasticities is assessed, due to the combination of efficient scale and decreasing returnto R&D: in our empirical estimates the scale effect tends to prevail for a given R&D intensity generating an increasing relation between total turnover and employment. These results have important implications for policymakers: innovation supporting policies should be correctly tailored and monitored since the results depend on the characteristics of the benefiting firms. Moreover, R&D intensity on GDP should be managed with care if taken as a policy target, given that the denominator is endogenous and non-linearly dependent on research expenditure.

BOGLIACINO Francesco; 

2014-10-02

Elsevier

JRC91372

http://www.sciencedirect.com/science/article/pii/S1517758014000241,    https://publications.jrc.ec.europa.eu/repository/handle/JRC91372,   

10.1016/j.econ.2014.04.002,