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Employment growth and innovation at the firm level

An empirical study


We analyze the influence of innovation on growth rates of employment in 859 Dutch manufacturing firms over the period 1983–1988. Whereas the (growth of the) R&D intensity of firms has a slightly negative impact on employment, we find that firms with a high share of product-related R&D (as a proxi of R&D related to industrial activities in an early stage of the life cycle) experienced an above average growth of employment. The same holds for firms which directed their R&D towards information technology. Smaller firms have, ceteris paribus, substantially higher growth rates of employment than their larger counterparts. Against our expectations, R&D cooperation has no significant impact on employment growth. The same holds for activities in the fields of biotechnology and new materials.

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Brouwer, E., Kleinknecht, A. & Reijnen, J.O.N. Employment growth and innovation at the firm level. J Evol Econ 3, 153–159 (1993).

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Key words

  • Innovation
  • Product-related R&D
  • Employment growth
  • Firm size
  • Information technology


  • O33
  • J23
  • C23