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Innovation effects on employment in high-tech and low-tech industries: evidence from large international firms within the triad

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Abstract

In this paper we investigate the role of financial shocks, such as the economic crisis since 2006, in the reallocation process of employment flows in high-tech and low-tech industries. The contributions of the paper to the literature are threefold. First, a general framework of employment growth is estimated by using a dataset made of 879 large international firms observed for the period 2002–2010 and localized in three economic areas: USA, Japan and Europe. Second, we develop a database merging the firms’ data with EPO patents data. In particular, the innovation variable is proxied by the R&D capital stock. Third contribution to the literature is to analyze the extent to which the economic crisis may affect the sensitivity of employment with respect to own innovation but also with respect to outside innovation, the R&D spillovers, in high-tech and low-tech industries. The empirical results suggest some important and significant results. This comparative finding could be the source of relevant industrial policy implications.

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Notes

  1. European economic area considers the following countries: Austria, Belgium, Denmark, Finland, France, Germany, Ireland, Italy, Luxembourg, Spain, Sweden, Switzerland, The Netherlands and the UK.

  2. (the Shepard’s lemma).

  3. This model is similar to from the Garcia, Jaumandreu and Rodriguez one exception made for the introduction of Eqs. (3) and (4). In any case we refer to them for further clarifications and details.

  4. See Maraut et al. (2008) for the methodology used for the construction of REGPAT.

  5. Please contact Helene.DERNIS@oecd.org to download the REGPAT database.

  6. The reference year is 2007. Sources for exchange rates and deflators are EUROSTAT.

  7. We used the exchange rates in Eurostat for the year 2007.

  8. Eurostat GDP deflators.

  9. We estimate productivity by Olley and Pakes procedure, by using ‘opreg’ STATA command.

  10. We estimate our model also by random effect panel model, as a robustness check, but the findings are similar. The results are available from authors upon request.

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Acknowledgements

The authors are grateful to the Editor and two anonymous reviewers whose comments greatly improved the quality of the paper. The results, conclusions, views, and opinions expressed in this paper are only attributable to the authors.

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Authors and Affiliations

  1. Department of Business and Economic Studies, Parthenope University, Via Generale Parisi 13, 80132, Naples, Italy

    L. Aldieri

  2. Department of Economic and Statistical Sciences, University of Salerno, Fisciano, Italy

    C. P. Vinci

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  1. L. Aldieri
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  2. C. P. Vinci
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Correspondence to L. Aldieri.

Additional information

Financial support from Parthenope University of Naples under project to sustain individual research by DR n. 988 30 November 2015 is gratefully acknowledged.

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Aldieri, L., Vinci, C.P. Innovation effects on employment in high-tech and low-tech industries: evidence from large international firms within the triad. Eurasian Bus Rev 8, 229–243 (2018). https://doi.org/10.1007/s40821-017-0081-9

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  • DOI: https://doi.org/10.1007/s40821-017-0081-9

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