Innovation, Small Firm Change, and Employment of Academic Skills

This paper starts from samples of economic literature hypothesizing and partly establishing a positive relationship between innovation, firm level change, and skill-bias. Confronting this literature with Danish empirics, and literature on small business economics, a research question on the generalizability of skill-bias emerge. Finally, taking advantage of unique Danish data, the empirical part of the paper reports findings indicating an increased likelihood of innovative small firms to hire a first academically skilled worker when compared to non-innovative counterparts. These findings generally support the literature on skill-bias, but some qualifying aspects from a small firm perspective are also stated