R&D, Embodied Technological Change and Employment: Evidence from Italian Microdata

This paper explores the employment impact of innovation activity, taking into account both\r\nR&D expenditures and embodied technological change (ETC). We use a novel panel dataset\r\ncovering 265 innovative Italian firms over the period 1998-2010. The main outcome from the\r\nproposed fixed effect estimations is a labor-friendly nature of total innovation expenditures;\r\nhowever, this positive effect is barely significant when the sole in-house R&D expenditures\r\nare considered and fades away when ETC is included as a proxy for innovation activities.\r\nMoreover, the positive employment impacts of innovation activities and R&D expenditures\r\nare totally due to firms operating in high-tech industries and large companies, while no jobcreation\r\ndue to technical change is detectable in traditional sectors and SMEs.