The Job Creation Effect of R&D Expenditures
18 Pages Posted: 3 Jun 2012
Date Written: June 2012
In this study we use a unique database covering 25 manufacturing and service sectors for 15 European countries over the period 1996–2005, for a total of 2,295 observations, and apply GMM‐SYS panel estimations of a demand‐for‐labour equation augmented with technology. We find that R&D expenditure – fostering product innovation – have a job‐creating effect, in accordance with the previous theoretical and empirical literature discussed in the paper. Interestingly enough, the labour‐friendly nature of R&D emerges in both the flow and the stock specifications. These findings provide further justification for the European Lisbon targets.
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