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Innovation and Employement in European Firms: Microeconometric Evidence IEEF, Final report, EUR 21698 EN

Project ID: HPSE-CT-2001-00047
Funded under: FP6-CITIZENS


The research project "Innovation and Employment in European Firms: Microeconometric Evidence", was aimed at studying the effects of innovation on the performance and growth of firms, with a focus on the effects on employment. In addition, the project set as an objective the coordinated work across countries using firm-level data, assessing the data available and trying to develop ways to use them for research at the European level. The research project also shared a methodological approach in the use of advanced econometric techniques. The research carried out can be grouped under four general subjects: European innovation data, Competition and innovation, Innovation and productivity, and Innovation and employment.
The research made use of the Third Community Innovation Surveys (CIS3), which is an EU-harmonised statistic, to assess the factors affecting innovation across countries. While this is a harmonised study, some important differences remain in the wording and different institutional framework for some questions and variation in statistical methods used. Taking this into account, the exploration of the remaining differences suggested at least three important forces: a trend towards incentive equalization derived from the EU; an increasing European-wide dimension of each market, which is likely to influence its inter-country structure; individual country and industry composition and evolution.
Our research on cooperation and innovation, confirms that firms¿ ability to take advantage of incoming spillovers, in the form of publicly available knowledge, and limit outgoing spillovers and appropriate the returns to their innovative efforts, has a positive effect on the likelihood of R&D agreements. Firms also appear less likely to engage in cooperation in industries with strong legal protection methods, and public support is positively related to the probability of undertaking cooperative agreements.

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