The paper examines the impact of diferent types of innovations-such as process, product, and R&D-on labor productivity and employment across several African nations. Utilizing data from the World Bank Enterprise Survey, the study constructs pseudo-panel data based on legal status, frm size, and industry type and employs the propensity score matching and the dose-response model to explore the relationship between innovation and labor market outcomes. The descriptive analysis indicates that 2,673 frms are engaged in at least one of the innovation activities, and 250 frms do not have any innovation activities. The propensity score matching fnds that the overall combined efect of all types of innovation is statistically signifcant and has a positive efect on the employment of non-production workers and skilled workers, but it harms their productivity. Not only this, but it has also a negative impact on the productivity of permanent, and unskilled workers. The only positive impact goes to the productivity of production workers. Except for skilled labor, no segments of the labor force have been impacted by product innovation, but it has statistically signifcant infuences on the productivity of all types of workers, still, production workers received a positive infuence. It also fnds that process innovation positively infuences the productivity of production workers and the employment of skilled, nonproduction, and production workers. On the other hand, permanent, non-production, and skilled employees respond negatively to process innovation. Regarding R&D innovation, except for production workers, all are negatively impacted and statistically signifcant. On employment creation, R&D has also a positive and statistically signifcant impact on employment except for permanent employees. On top of this, the fndings of the dose-response function are also in line with the propensity score matching method except for the combined efect of innovation on production workers. In other words, the intensity has a declining dose efect while innovation has a growing efect by the propensity score method for production workers. Additionally, the dose-response function shows a strong positive correlation between the intensity of innovation and skilled workers with various trends as well as permanent employees. The efect is initially diminishing for unskilled workers and non-production workers, but it gradually increases over time. In general, the fnding challenges the assumption that innovation uniformly improves productivity, instead revealing a more complex dynamic where job creation comes at the cost of lower productivity in certain labor segments
