Technological catching-up, sales dynamics, and employment growth: Evidence from China's manufacturing

Xiaodan Yu, Giovanni Dosi

Risultato della ricerca: Contributo in rivistaArticolo in rivista

Abstract

This article investigates the microeconomics of employment dynamics, using a Chinese manufacturing firm-level data set over the period 1998-2007. It does so in the light of a scheme of "circular and cumulative causation," whereby firms' heterogeneous productivity gains, sales dynamics and innovation activities ultimately shape the patterns of employment dynamics. Using firm's productivity growth as a proxy for process innovation, our results show that the latter correlates negatively with firm-level employment growth. Conversely, relative productivity levels, as such a general proxy for the broad technological advantages/disadvantages of each firm, do show positive effect on employment growth in the long-run through replicator-type dynamics. Moreover, firm-level demand dynamics play a significant role in driving employment growth, which more than compensate the labor-saving effect due to technological progress. Finally, and somewhat puzzlingly, the direct effects of product innovation and patenting activities on employment growth appear to be negligible.
Lingua originaleEnglish
pagine (da-a)79-107
Numero di pagine29
RivistaIndustrial and Corporate Change
Volume28
DOI
Stato di pubblicazionePubblicato - 2019

Keywords

  • employment growth
  • catching up

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