Towards green growth: How does green innovation affect employment?

We examine the relationship between green innovation and employment from data taken from the Spanish Technological Innovation Panel (PITEC) for period 2007-2011. The increasing relevance of environmental issues for the Spanish economy, its unemployment problem and the uniqueness in its innovation structure make it a proper and interesting context to investigate green innovation dynamics. We find a positive relationship between green innovation and employment, and the relationship is stronger for firms in the so-called 'dirty' industries. In addition, we show that the relationship is positive for firms that introduce green innovation voluntarily, as compared to firms that introduce green innovation merely to comply with regulations. A positive and significant relationship is also found between employment and firms that report an increase in the degree of importance paid to green innovation.