Abstract
The purpose of this paper is to analyze the role of the knowledge diffusion process in employment effects of sustainable development investments for large international firms. We present an empirical analysis based upon a dataset composed of worldwide Research and Development (R&D) -intensive firms over the period 2002–2010. In order to identify the technological relatedness measure between the firms, we use the friendly environmental patents’ distribution. The drivers of labor innovation effects are identified as a complex combination of job displacement and compensation forces of innovation. Two research questions are investigated: first, we wonder whether green economy investments stimulate firm-level jobs within three different environmental contexts: water, waste and energy; second, we would like to learn the extent to which the knowledge diffusion is an important channel supporting labor in the environmental context, by analysing the impact of intra-industry externalities. From the empirical results, we can observe that environmental spillovers have a negative impact, by confirming the prevalence of the displacement effect. This finding is extremely important for policy implications. Indeed, not only economic incentives to allow the transition to cleaner technologies are required, but also stronger actions to favor job creation relative to environmental activities are needed for a full sustainable achievement of firms.
Highlights
The studies about the sustainable use of economic resources are increasing [1,2]
We identify for each firm the following variables: net sales (S), the number of employees (L), the annual capital expenditures (C), annual Research and Development (R&D) expenditures (RD), annual operating profit (OP) and the main industry sectors according to the Industrial Classification Benchmark (ICB) at the two-digit level
In order to deal with the endogeneity of the explanatory variables, we estimate Equation (1) using a one-stage generalized method of moments (GMM) estimator [76,77], which combines the standard set of equations in the first difference with suitably lagged levels as instruments (GMM in first differences), with an additional set of equations in levels with suitably lagged first differences as instruments
Summary
There are many studies investigating the link between innovation for increasing firm-level output or productivity and job-creation effect [3], where this link is found to be quite weak. This result seems to confirm the technological unemployment because of new machines [4]. Product innovations or the introduction of new products for the emergence of new markets [7,8] can determine positive job-creation effects, while process innovations or the implementation of new and significantly improved production method [7,8] could lead to technological unemployment because of increasing labor productivity. There are indirect effects as a compensation for the reduction in employment stemming from process innovations
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