R&D and employment: An application of the LSDVC estimator using European microdata

The job creation effect of business R&D is tested applying the dynamic LSDVC estimator to a longitudinal database covering 677 European companies over the period 1990-2008. Job creation is detected in services and high-tech manufacturing, but not in traditional sectors.

► We test the job creation effect of business R&D. ► We use a firm-level panel dataset of European companies covering the 1990-2008 period. ► A job-creation effect of R&D is detected in services and high-tech manufacturing. ► We use the Least Squared Dummy Variable Corrected estimator for unbalanced panel-data.