Employment, Innovation, and Productivity: Evidence from Italian Microdata.
B. Hall, F. Lotti & J. Mairesse
Italian manufacturing firms have been losing ground with respect to many
of their European competitors. This paper presents some empirical
evidence on the effects of innovation on employment growth and therefore
on firms' productivity with the goal of understanding the roots of such
poor performance. We use firm level data from the last three surveys on
Italian manufacturing firms conducted by Mediocredito-Capitalia, which
cover the period 1995-2003. Using a modified version of the model
proposed by Harrison, Jaumandreu, Mairesse and Peters (2005), which
separates employment growth rates into those associated with old and new
products, we provide robust evidence that there is no employment
displacement effect stemming from process innovation. The sources of
employment growth during the period are split equally between the net
contribution of product innovation and the net contribution from sales
growth of old products. However, the contribution of product innovation
is somewhat lower than that for the four comparison European countries
considered by Harrison et al.
Keywords: Innovation, employment, productivity, Italy.
JEL Classiffication: L60, O31, O33.
UNU-MERIT Working Papers