June 2015

IZA DP No. 9147: Innovation and Employment in Patenting Firms: Empirical Evidence from Europe

Vincent Van Roy, Daniel Vertesy, Marco Vivarelli

published as 'Technology and Employment: Mass Unemployment or Job Creation? Empirical Evidence from European Patenting Firms' in: Research Policy, 2018, 47 (9), 1762 - 1776

This paper explores the possible job creation effect of innovation activity. We analyze a unique panel dataset covering almost 20,000 patenting firms from Europe over the period 2003-2012. The main outcome from the proposed GMM-SYS estimations is the labour-friendly nature of innovation, which we measure in terms of forward-citation weighted patents. However, this positive impact of innovation is statistically significant only for firms in the high-tech manufacturing sectors, while not significant in low-tech manufacturing and services.