The role of innovation for employment growth among firms in developing countries: Evidence from Nigeria

Abstract

This paper examines the nexus between innovation and employment growth. In contrast to most studies that employ data from technologically advanced economies, the study uses well-documented data from a leapfrogging and catching-up economy in sub-Saharan Africa. We find a positive relationship between process innovation and employment growth among Nigerian manufacturing and services firms from 2005 to 2010. Furthermore, product innovation is also positively related to employment growth in manufacturing. This study’s peculiarity is that innovative firms’ ability to grow rely on their operations in regional and export markets, respectively. Our study contributes to the understanding of innovation and firm development in emerging economies.