Localised Technological Progress And Intra-Sectoral Structures Of Employment

Abstract

In this paper we put forward a model that explains a firm's employment growth with the degree of technological efficiency and labour costs. To measure efficiency, we use a non-parametric linear programming method. DEA. The results of empirical analysis of 450 firms in 12 manufacturing sectors confirm that innovative firms experience stronger employment growth. Because the demand growth effect of technological leadership outweighs the factor saving effect, firms which m technological leaders are in most cases the creators of jobs. Technologically backward firms, on the other hand, have few options to compensate their demand loss probably caused by deteriorating competitiveness. Consequently, their employment growth is relatively weak. The employment growth additionally depends on the type of factor combination, i.e. the technological trajectory chosen by an individual firm. The trajectory's effects vary significantly across industries. The effect of labour costs is generally negative. However, technologically leading industries are. less sensitive to increases in labour costs than nature industries.

Keywords:

• Technological Progress
• Employment
• Data Envelopment Analysis

^∗An earlier draft of this paper was presented at the 1998 EAEPE conference in Lisbon. Portugal. We would like to thank Andrew Tylcote and Uwe Cantner for their helpful suggestions. We are responsible for any remaining errors.

^∗An earlier draft of this paper was presented at the 1998 EAEPE conference in Lisbon. Portugal. We would like to thank Andrew Tylcote and Uwe Cantner for their helpful suggestions. We are responsible for any remaining errors.

Notes

^∗An earlier draft of this paper was presented at the 1998 EAEPE conference in Lisbon. Portugal. We would like to thank Andrew Tylcote and Uwe Cantner for their helpful suggestions. We are responsible for any remaining errors.