The firm-level employment effects of innovations in high-tech US manufacturing industries

By Alex Coad, Rekha Rao. 2011

153 citations recorded by the source corpus.

We focus on four two-digit manufacturing industries that are known for their high patenting activity. We then use Principal Components Analysis to generate a firm- and year-specific ‘innovativeness’ index by extracting the common variance in a firm’s patenting and R&D expenditure histories. To begin with, we explore the heterogeneity of firms by using semi-parametric quantile regression. We then move on to parametric regressions that include a weighted least squares (WLS) analysis, which explicitly takes into account the different job-creating potential of firms of different sizes. As a result, we investigate the effect of innovation on total number of jobs, whereas previous studies have focused on the effect of innovation on firm behavior. Indeed, previous studies have typically taken the firm as the unit of analysis, implicitly weighting each firm equally according to the principle of ‘one firm equals one observation’. Our results suggest that firm-level innovative activity leads to employment creation that may have been underestimated in previous studies.

Subfields: Economics and Econometrics, Management of Technology and Innovation

View Paper: https://www.semanticscholar.org/paper/274a6e51daa2a7b3941cfa3274fd6bdbf9a65099

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In Management of Technology and Innovation

Citations in the corpus

Innovation, Employment and Skills in Advanced and Developing Countries: A Survey of the Literature (2011, background): “In a very recent study, Coad and Rao (2011) limit their focus on U.S. high-tech manufacturing industries over the period 1963–2002 and investigate the impact of a composite innovativeness index (comprising information on both R&D and patents) on employment.”
THE INNOVATIONâ€ EMPLOYMENT NEXUS: A CRITICAL SURVEY OF THEORY AND EMPIRICS (2016, unknown): “Restricting the focus to the high-tech manufacturing sector, where the positive role of innovative activities proved so far more intense, Coad and Rao (2011) combine patent and R&D data to investigate the relationship between innovation and employment growth in the United States.11 They build a…”
Measuring the Occupational Impact of AI: Tasks, Cognitive Abilities and AI Benchmarks (2020, methodology): “Other measures of the occupational impact of AI may relate to investments in research and development or the count of AI related patents since over the past decades such measures have been used by the economic literature as proxy for the level of innovation (Coad and Rao, 2011; Bogliacino et al., 20”
Technological change and employment: is Europe ready for the challenge? (2018, unknown): “…which are generated by technological change and which might counterbalance—partially or totally—the initial labor-saving impact of process innovation2 (see also Petit 1995; Vivarelli 1995; Vivarelli and Pianta 2000; Pianta 2005; Coad and Rao 2011; Vivarelli 2013, 2014; Calvino and Virgillito 2017).”
Embodied and disembodied technological change: The sectoral patterns of job-creation and job-destruction (2019, methodology): “Most of the extant literature addresses the job-creating/destroying effects of technological change at firm-level, from which the net job-creating effects emerge more straightforwardly when looking at very innovative firms, belonging to high-tech sectors, and when proxies of disembodied technical ch”