Innovations, growth and employment - An empirical analysis on the base of the ifo firm panel

The ifo firm panel includes a large set of data for West German manufacturing firms from 1980-92 which permits a detailled analysis of firm behaviour. In this paper, estimates of the impact and the determinants of innovation behaviour are presented. The empirical results reveal that innovative firms exhibit more output and employment growth than non-innovative firms. The quantitative impact is non-negligible. The results also reveal that innovative behaviour depends positively on firm size and the business cycle.