The Impact of Firm-Level Innovation on Labor Productivity and Employment in Selected African Countries

Autor: Zerayehu Sime Eshete, Getaw Tadesse Gebreyohanes
Rok vydání: 2022
Popis: The overriding objective of this study is to examine the impact of different types of innovations (overall, process, and R&D) on different segments of labour (productivity and employment) in selected African countries, namely, Ethiopia, Kenya, Rwanda, Zambia, Zimbabwe, Ghana, Cameroon, Senegal, and Cote d'Ivoire. The study employs data from the World Bank Enterprise Survey and converts it into pseudo panel data based on legal status, firm size, and industry type as all these three exogenous variables are common in all countries. The study uses the Propensity Score Matching method and the Dose-Response Model to capture the impact of innovation and the dosage of innovation on labour productivity and employment. The descriptive analysis indicates that 2,673 firms are engaged in at least one of the innovation activities, and 250 firms do not have any innovation activities. The Propensity Score Matching finds that process and R&D innovations have statistically significant impacts on employment. But the process of innovation has a negative effect on the productivity of non-production and skilled employees. R&D innovation has a negative and statistically significant impact on the productivity of permanent, non-production, skilled, and unskilled workers. In addition to these, the Dose-Response-Model exhibits the positive relationship between innovation and employment of full-time permanent employees, full-time production, and full-time nonproduction workers, and the impact becomes greater when the dose increases. However, there is a negative relationship between innovation and employment of unskilled production workers, after which their relationship becomes positive. Classification code JEL: O31, O32
Databáze: OpenAIRE