Innovation and job creation : a sustainable relation?

This study compares the employment growth patterns of innovative and non-innovative firms focusing on whether there are systematic differences in the persistence of the jobs created. Using data from a unique longitudinal dataset of 3,300 Spanish firms over the years 2002-2009, obtained by matching different waves of the "Encuesta sobre Innovación en las Empresas españolas" and adopting a semiparametric quantile regression approach, we examine employment serial correlation. The empirical results of the study indicate that the jobs created by innovative firms generally appear to be rather persistent over time whereas those created by non-innovative firms do not. Among declining firms, non-innovators tend to deteriorate faster in terms of economic performance. In addition, among those firms experiencing high organic employment growth, smaller and younger innovative firms grow more on average than larger innovative firms. Overall, evidence suggests that being innovative supports and stabilises a firm's organic employment growth pattern and being smaller and younger seems to be a sufficient condition to experience high employment growth, i.e. - with regard to the latter - it is not necessary to have a comparably high R&D spending / being an R&D intensive company.