Eco-innovation, firms' employment growth, and the mediating role of export activities

This paper analyses the growth-enhancing effect of different types of innovative activities, i.e. standard-innovation and eco-innovation, by focusing on the potential role of exports in mediating the innovation-growth nexus. The empirical study is carried out on a representative sample of Italian firms built by integrating data from the Italian CIS-Community Innovation Survey with the ASIA-FRAME database of the Italian National Statistical Office (ISTAT), which reports information on export values and employment dynamics. The econometric analysis applies a two-step counterfactual analysis and a Structural Equations Model (SEM). Results show that export activities, spurred by engagement in innovation efforts, represent a powerful transmission channel through which innovation displays its effect on firms' employment growth. Moreover, results highlight the existence of some heterogeneity in the capacity of different types of innovation activities (i.e., standard-innovation vs. eco-innovation) to leverage the export channel in fostering firms' employment growth. In particular, the empirical evidence has identified a strong indirect export-mediated impact for Efficiency-improving Eco-innovation. On the contrary, the direct effect of innovation on employment appears to be prevalent in the case of Pollution Reducing Eco-innovation.