1. Technological catching-up, sales dynamics, and employment growth: evidence from China's manufacturing.
- Author
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Dosi, Giovanni and Yu, Xiaodan
- Subjects
TECHNOLOGICAL innovations ,EMPLOYMENT ,SALES ,INDUSTRIAL productivity - 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. [ABSTRACT FROM AUTHOR]
- Published
- 2019
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