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 between these two categories of firms in the persistence of the jobs they create. To this end, a unique longitudinal dataset of 3,304 Spanish firms over the years 2002-2009, and a semi-parametric quantile regression approach are used. The empirical results indicate that, ceteris paribus, innovative, smaller, and younger firms are more likely to experience high employment growth episodes compared to non-innovative firms. More interestingly, among those firms that more contribute to yearly job creation (e.g. high-growth firms), only innovative companies are able to sustain high-growth over time, whereas non-innovative firms are not. Besides, among declining firms, non-innovators tend to deteriorate faster in terms of economic performance than innovators.JRC.B.3-Territorial Developmen