Employment, Innovation, and Productivity: Evidence from Italian Microdata

39 Pages Posted: 9 Aug 2007 Last revised: 22 Feb 2015

See all articles by Bronwyn H. Hall

Bronwyn H. Hall

University of California at Berkeley; National Bureau of Economic Research (NBER); Institute for Fiscal Studies (IFS); Max Planck Institute for Innovation and Competition

Francesca Lotti

Bank of Italy

Jacques Mairesse

National Institute of Statistics and Economic Studies (INSEE) - Center for Research in Economics and Statistics (CREST); Maastricht University - United Nations and Maastricht Economic Research Institute on Innovation and Technology (UNU-MERIT); National Bureau of Economic Research (NBER)

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Date Written: August 2007

Abstract

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 slightly modified version of the model proposed by Harrison, Jaumandreu, Mairesse and Peters (HJMP 2005), which separates employment growth rates into those associated with old and new products, we find no evidence of significant employment displacement effects 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 to employment growth is somewhat lower than in the four European countries considered in HJMP 2005, and the contribution of innovation in general to productivity growth is almost nil in Italy during this period.

Suggested Citation

Hall, Bronwyn H. and Lotti, Francesca and Mairesse, Jacques, Employment, Innovation, and Productivity: Evidence from Italian Microdata (August 2007). NBER Working Paper No. w13296. Available at SSRN: https://ssrn.com/abstract=1005898

Bronwyn H. Hall (Contact Author)

University of California at Berkeley ( email )

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Francesca Lotti

Bank of Italy ( email )

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Jacques Mairesse

National Institute of Statistics and Economic Studies (INSEE) - Center for Research in Economics and Statistics (CREST) ( email )

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Maastricht University - United Nations and Maastricht Economic Research Institute on Innovation and Technology (UNU-MERIT)

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