Abstract
This paper explores the relationship between firm size and sustainable innovation in large international firms. To this end, we develop a labor demand framework. The contribution to the literature is to explore external knowledge in determining the employment impact of sustainable innovation. Our investigation is based on firms in three economic areas: Europe, Japan, and the United States. In this way, we will appreciate the extent to which the technological spillovers are important from a geographical perspective. The findings provide evidence of the significance of spillover effects on a firm’s size; however, these effects depend on the spillover stock type.
Highlights
The analysis concerning the impact of sustainable innovation on a firm’s size in terms of employment is subject to present economic debate [1,2,3]
The main contribution of our analysis is that we explore the role of external knowledge in the context of sustainable innovation
Our analysis attempts to provide this by paying attention to the knowledge diffusion process
Summary
The analysis concerning the impact of sustainable innovation on a firm’s size in terms of employment is subject to present economic debate [1,2,3]. The investigation concerning the impact of sustainable innovations on firms’ size is important with regard to increasing production opportunities. Since theoretical and empirical work in the literature has focused on the internal firm size impact of innovation, this paper deals with the important role of international, national, inter-industry, and intra-industry spillovers in affecting firms’ sizes in Europe, Japan, and the USA [8,9,10,11,12].
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