Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/162240
Authors: 
Kancs, d'Artis
Siliverstovs, Boriss
Year of Publication: 
2017
Series/Report no.: 
KOF Working Papers 428
Abstract: 
The present paper estimates and decomposes the employment effect of innovation by R&D intensity levels. Our micro-econometric analysis is based on a large international panel data set from the EU Industrial R&D Investment Scoreboard. Employing flexible semi-parametric methods - the generalised propensity score - allows us to recover the full functional relationship between the R&D investment and firm employment, and to address important econometric issues, which is not possible in the standard estimation approach used in the previous literature. Our results suggest that modest innovators do not create and may even destruct jobs by raising their R&D expenditures. Most of the jobs in the economy are created by innovation followers: increasing innovation by 1% may increase employment up to 0.7%. The job creation effect of innovation reaches its peak when the R&D intensity is around 100% of the total capital expenditure, after which the positive employment effect declines and becomes statistically insignificant. Innovation leaders do not create jobs by further increasing their R&D expenditures, which are already very high.
Subjects: 
innovation
R&D investment
causal inference
semi-parametric
employment
job creation
GPS
JEL: 
C14
C21
F23
J20
J23
O30
O32
O33
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

Files in This Item:
File
Size
658.95 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.