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The authors examine the differences in the behavior of the innovation between the Spanish agrifood and manufacturing firms using firm-level data from 1990-2008 to analyze the persistence in innovation and to explore the explanatory determinants of the probability of being product and process innovator. Survival functions, transition probability matrices, and dynamic discrete choice panel data models are combined to measure persistence. The results suggest that in the food industry the persistence of process innovation is higher than in product innovation. Environmental and market determinants such as market changes or appropriability are more decisive to explain innovation in food industry. By contrast, several determinant variables for innovation activities in the manufacturing sector seem not to be linked with the innovation in food firms. That is the case of the outsourcing ratio and the positive evolution of market share of the individual firm.

Numerous empirical studies focus on the drivers of environmental innovation or their potential employment effects. Nevertheless, we have scarce knowledge about whether factors that influence eco-innovation and employment generation are related. The main purpose is to analyze the synergies between eco-innovation and employment using a sample of more than 6000 innovative Spanish manufacturing and service firms. Using different econometric procedures, the main findings show that size, R&D and export influence eco-innovation and employment in the same direction, while age, belonging to a group, public subsidies and internal and external knowledge sources exert a different effect. Thus, older firms create less employment but have a high probability of being environmental innovators compared with younger firms. Furthermore, the size of the company moderates the positive role of eco-innovation on employment growth, while young firms not belonging to a group (eco-entrepreneurs) contribute more to employment growth than old firms belonging to a parent firm. Implications for scholars, managers and policy makers in terms of sustainable and economic growth are made.

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