The Impact of Innovation on Employment

Meriküll, Jaanika

doi:10.2753/eee0012-8775480202

Cited by 34 publications

(13 citation statements)

References 20 publications

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“…Despite the ambiguity in the theoretical literature, there exists some level of general consensus in the empirical literature about the relationship between product innovations and employment at the firm-level (Vivarelli, 2014;Pianta, 2005, for recent survey of the literature). Copious empirical works in the literature find a positive effect of product innovations on employment (Van Roy et al, 2018;Harrison et al, 2014;Meriküll, 2010;Peters, 2008;Hall et al, 2008;Piva et al, 2005). Harrison et al (2014) analysed the stimulating effects of innovation on employment using innovation survey data on both manufacturing and service sector firms in France, Germany, Spain and the United Kingdom.…”

Section: Related Literaturementioning

confidence: 99%

“…The intensity of product innovation is only observed when a firm introduces an innovation (w = 1), otherwise it is assumed to be unobserved (Amemiya, 1985, p. 384 & 385). Equations (8.2) and (8.3) are specified as a Type II Tobit model (Amemiya, 1985) where ( (Meriküll, 2010;Piva et al, 2005, among others), empirical findings from Harrison et al (2014) and Peters (2008) indicate that the positive employment effect of product innovations is generated from the sales of new products. We, therefore, hypothesise that the total employment impact of product innovation is positive, but the positive effect is moderated by the intensity of product innovation.…”

Section: Empirical Modelmentioning

confidence: 99%

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The employment impact of product innovations in sub-Saharan Africa: Firm-level evidence

2019

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Innovation has become a key interest in sub-Saharan Africa (SSA), as it is argued to be pervasive, and play eminent role in generating employment. There is, however, a dearth of empirical evidence assessing the impact of innovation on firm employment for SSA. This paper investigates the impact of product innovations on job creation using data from the recent waves of the Enterprise Survey merged with Innovation Follow-Up Survey for SSA countries for which both surveys are available. We apply the Dose Response Model under continuous and heterogeneous responses to treatment. The results reveal a positive impact of product innovations on total employment. This result is, however, found to hold only at specific intervals of product innovation intensities. Our analyses also show that product innovations tend to create both temporary and permanent jobs as well as skilled and unskilled jobs. However, the positive impact of product innovations on temporary and unskilled employment tends to outweigh that of permanent and skilled employment, raising questions about the security and quality of the new jobs generated by product innovations.

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Section: Related Literaturementioning

confidence: 99%

Section: Empirical Modelmentioning

confidence: 99%

The employment impact of product innovations in sub-Saharan Africa: Firm-level evidence

2019

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“…Hence, formal entrepreneurs are equipped with necessary information that can be used for innovative activities (Mukkala, 2010; Kchaich Ep Chedli, 2014). Literature observed that registered firms are more innovative and show higher employment growth than unregistered firms (Meriküll, 2010). This is because formal firms have large share of product innovators on the market, so price competition is reduced between formal and informal firms.…”

Section: Differences In Growth Between Formal and Informal Small Businessesmentioning

confidence: 99%

Differences between firms from the formal sector and the informal sector in terms of growth

Abdallah¹

2017

JEEE

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Purpose Small businesses growth has become an important area of study in the field of entrepreneurship. This paper aims to extend the inquiry by investigating whether there is a significant difference in growth between firms from the formal sector and the informal sector in the least developing countries (LDCs), particularly Tanzania. Design/methodology/approach A survey strategy as well as non-probability sampling are used. The sampling included 50 formal and 61 informal small businesses from the furniture industry. Data collected were evaluated using chi square and compounded annual growth rate (CAGR) techniques. Findings The results indicate that firms from the formal sector do not grow faster than firms from the informal sector. on the contrary, our tests reveal that firms from the informal sector predominantly grow faster than firms from the formal sector. Research limitations/implications The study was conducted in Tanzania which is just one of the 48 LDCs in the world. Second, the literature that is used predominantly applies to developed countries. Third, the field work dependent on the respondent’s perception. Finally, change of measurement scale from five to three is ought to have contributed to mixed findings. Practical implications The overall implications are that external factors like inadequate regulatory tax systems may affect growth of formal small businesses and thus influence market opportunities for informal small businesses. Further, internal factors like inefficiencies of workers from formal enterprises may affect growth and therefore create more opportunities for informal enterprises. Originality/value Exploring differences between firms from the formal sector and the informal sector, and the way five scales were aggregated into three scales in the methodology.

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“…Benavente and Lauterbach (2008) found a significant, positive impact of sales of new products (product innovation) on the employment growth of Chilean firms, but the effect of process innovation appeared to be insignificant. The study of Meriküll (2010) on Estonian enterprises revealed that innovation is an important determinant of employment, when he did not distinguish between product and process innovation. When he made that distinction, he found that both product and process innovation exert a positive effect on employment, but only the impact of process innovation is a significant one.…”

Section: Literature Reviewmentioning

confidence: 99%

The Employment Effect of Innovation: Evidence from Bangladesh and Pakistan

Waheed¹

2022

pdr

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The analysis of the impact of innovation on employment growth is an important topic for policy-makers. Unemployment is an important social topic, and the effects of innovation on employment are often poorly understood. Despite the significance of this relationship, very few studies on this topic are yet available for developing countries compared with the developed ones. This paper contributes to this scant literature by investigating the employment effects of innovation for two South Asian developing countries: Bangladesh and Pakistan. We further analyse whether this relationship shows country-specific and industry-specific differences. Our analysis shows that both product and process innovation spur employment in this region as a whole, in both low-tech and high-tech industries, even after controlling for a number of firm-specific characteristics. Moreover, although both innovation types also have significant, positive impacts on employment growth of all Bangladeshi and of all Pakistani firms separately, they are important factors for employment growth of only high-tech Bangladeshi firms and of only low-tech Pakistani firms. Contrary to most previous studies, we witness an insignificant effect of growth of labour cost on employment growth, perhaps due to the availability of cheaper labour force compared with the developed countries. We notice that some of the innovation determinants exert different influences across industries and across both countries. The same holds true for the determinants of employment growth. JEL Classification: J23, O31, O33 Keywords: Bangladesh, Employment Growth, Pakistan, Product Innovation, Process Innovation

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The Impact of Innovation on Employment

Cited by 34 publications

References 20 publications

The employment impact of product innovations in sub-Saharan Africa: Firm-level evidence

The employment impact of product innovations in sub-Saharan Africa: Firm-level evidence

Differences between firms from the formal sector and the informal sector in terms of growth

The Employment Effect of Innovation: Evidence from Bangladesh and Pakistan

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