Employment effect of innovation

Kancs, d’Artis; Siliverstovs, Boriss

doi:10.1007/s00181-019-01712-6

Cited by 5 publications

(11 citation statements)

References 28 publications

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“…The process innovation can reduce employment as a direct effect when production technology is improved. However, the process innovation can increase employment as an indirect effect when the demand for lower priced products is higher (Kancs & Siliverstovs, 2017).…”

Section: The Relationship Between Innovation and Employmentmentioning

confidence: 99%

“…Similarly, the test results show that technological innovations have no effect on unemployment. Kancs and Siliverstovs (2017) investigated the relationship between R&D expenses and firm's employment through Generalised Propensity Score (GPS) model for 483 firms which are hightech industry in 2007. The results showed that R&D expenses had a positive and significant effect on employment during medium and med-high innovation degree.…”

Section: Literature Reviewmentioning

confidence: 99%

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Innovation—Unemployment Nexus: The case of EU countries

Yıldırım

Erdoğan

et al. 2020

Int. J Fin Econ

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In order to achieve a sustainable growth and development process in a globalised competitive environment, the effect of monitoring the technological developments of the national economies is a necessity. Innovation, shown as a cause of technological developments, contributes to the transformation of technology into social and economic benefits. Innovation changes the structure of employment. However, there is no consensus in the literature about how innovation affects employment. Some suggest that technological innovations will lead to an increase in unemployment as a result of the substitution of machines instead of labour. The others state that technological innovations can improve the working life and create a reducing effect of unemployment as a result of every technological innovation creating their own fields of work. The aim of this study is to examine the effects of innovation on unemployment. The data of 12 EU countries with high and relatively low level of innovation were analysed with the panel threshold model for the period of 1998-2015. Innovation in high and low regimes, has effects that will increase unemployment. Technological development increases the unemployment rate in both country groups in both regimes of innovation level.

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Section: The Relationship Between Innovation and Employmentmentioning

confidence: 99%

Section: Literature Reviewmentioning

confidence: 99%

Innovation—Unemployment Nexus: The case of EU countries

Yıldırım

Erdoğan

et al. 2020

Int. J Fin Econ

View full text Add to dashboard Cite

show abstract

“…It is well known that firm's innovation outcomes (product or process) result from a complex process affected by institutional, macroeconomic and technological factors that are usually exogenous of the firm's behavior. Moreover, the mechanisms operating between innovation outcomes and employment described above strongly depend on demand features, market structure and competition (Breemersch et al 2019;Kancs and Siliverstovs 2019). In this regard, recognized the limitations associated with the firm level analysis to capture the displacement and compensation effects (Barbieri et al 2019), we pose that innovation strategies determine innovation outcomes and ultimately affect innovation effects in the firm's workforce quantity and quality.…”

Section: Innovation Strategies and Types Of Innovationmentioning

confidence: 99%

“…However, the relationship between technical change and employment is a classic topic that has received attention from diverse research streams, based on different theoretical basis and at different aggregation levels (Dosi and Mohnen 2019;Calvino and Virgillito, 2018;Vivarelli 2014;Freeman et al 1992). This wide and large body of literature has demonstrated that there is a complex, no linear relationship between innovation and employment which effects are neither homogenous nor immediate (Herstad and Sandven 2019;Kancs and Siliverstovs 2019;Piva and Vivarelli 2018).…”

Section: Introductionmentioning

confidence: 99%

Politics as a determinant of primary school provision: the case of Uruguay

Azar

2021

Cliometrica

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A large and rich body of literature has shown that the relationship between innovation and employment is complex and dynamic in nature. From a firm's level analysis, recent researches have shown heterogeneous empirical patterns for developed and developing countries. This paper contributes by inquiry in the role of innovation strategies as determinants of the firm's employment growth in a Latin American small middleincome country. Adapting econometric structural models currently in vogue, we discuss the effects of three innovation strategies (Make, Buy, Make&Buy) on the firm's workforce growth. In line with the literature, we identify a significant positive relation between product innovation associated with Make and Make&Buy strategies, however, on the contrary to most recent research we find a positive and significant effects of process innovation associated to Buy strategies. Considering technological, sectoral and firm characteristics, our findings show a clear positive effect of any innovation strategy in the growth of the firm's workforce. Meanwhile, no innovative strategies negatively affect workforce growth. Our findings contribute by deepening the understanding of the firm level determinants of employment in developing countries. We analyze our result in the light of a recent but extensive evidence on the relationship between innovation and employment at firm's level in Uruguay. In particular, we discuss the traditional explanation on the firm's technological behavior in Latin America, to discuss the effects on employment of integrative innovation strategies in Uruguay.

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“…To the best of our knowledge, the only paper that examines the non-linear unemployment-innovation nexus is Kancs and Siliverstovs (2019). They empirically test the assumption of a non-linear relationship between employment and innovation intensity (research and development expenditure to sales) and examine the assumptions using firm-level data.…”

Section: Introductionmentioning

confidence: 99%

The non‐linear impacts of innovation on unemployment: Evidence from panel data

Law

2022

Int. J Fin Econ

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This article examines the linear and non‐linear impacts of innovation on unemployment in 61 countries, covering annual data from 2007 to 2016. The relationship is estimated by deploying the system generalised method of moments (SGMM) estimation. Alternative instruments for the SGMM estimation and cross‐sectional threshold estimation are utilised to investigate the estimation robustness. Although the negative linear relationship between innovation and unemployment is not robustly supported in the linear models, the empirical results of non‐linear models suggest the existence of an inverted‐U effect of innovation on unemployment rate. The marginal impact of innovation also supports the inverted‐U relationship in which only the innovation at the maximum and mean level contributes to lower unemployment. Additionally, the negative marginal effect is larger at the maximum level compared to the mean level. The robustness estimations that use alternative instruments and the Hansen threshold regression also support the non‐linear relationship. On the basis of the findings, although innovation should be encouraged to create more jobs, policymakers are advised to consider interventions in job protection, such as offering reskilling programs to mitigate rising unemployment following the initial efforts to promote innovation.

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Employment effect of innovation

Cited by 5 publications

References 28 publications

Innovation—Unemployment Nexus: The case of EU countries

Innovation—Unemployment Nexus: The case of EU countries

Politics as a determinant of primary school provision: the case of Uruguay

The non‐linear impacts of innovation on unemployment: Evidence from panel data

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