Resource title

Human capital and innovation in East and West German manufacturing firms

Resource image

image for OpenScout resource :: Human capital and innovation in East and West German manufacturing firms

Resource description

The paper analyses the theoretical and empirical relationship between employment, skill structure and innovation in East and West German manufacturing firms. The econometric part builds on firm data from the Mannheim Innovation Panel 1993, 1994 and 1995. In the German industrial sector, especially in East Germany, employment has declined and the share of highly skilled labour has risen. The econometric investigation of labour demand, based on the translog production function, reveals differences in the firms? behaviour in East and West German manufacturing and between innovative and non-innovative firms. It is shown that complex patterns of substitution between capital and different types of labour emerge, which depend on the stage of economic transformation, the type of firms, wage setting behaviour and public policy. The results suggest that in the current stage of transition subsidising labour might be more effective for creating jobs in East Germany than promoting R&D and capital equipment. Subsidies can be lower the higher the workers? qualification level is.

Resource author

Friedhelm Pfeiffer

Resource publisher

Resource publish date

Resource language

eng

Resource content type

text/html

Resource resource URL

http://hdl.handle.net/10419/24237

Resource license

Adapt according to the presented license agreement and reference the original author.