Recent research has underscored the prominent role played by a small fraction of fast-growing new firms in contributing to aggregate net employment growth. While it is typically assumed that those firms experience this superior performance thanks to their ability in undertaking technolog- ical innovation, few empirical studies have explicitly addressed this issue. This article examines the innovation-employment nexus for start-ups using the Kauffman Firm Survey (KFS), a unique longitudinal dataset tracking a single cohort of US firms founded in 2004. Results based on fixed effects panel quantile regressions indicate an overall positive but heterogeneous effect of innova- tion activities on the conditional employment growth distribution. More in detail, the findings reveal that both research and development (R&D) and patents have a positive association with employment growth especially for those new firms experiencing high-growth.
Innovation and job creation in (high-growth) new firms
Pietro Santoleri
working paper 19/2019