The effect of innovation on employment: Mexico and Ecuador


  • Delia Margarita Vergara Reyes Universidad Nacional Autónoma de México, Instituto de Investigaciones Económicas
  • Alex J. Guerrero Universidad Nacional de Loja, Carrera de Finanzas y GRIPICO UCM
  • Guillermo Arenas Díaz Università Cattolica del Sacro Cuore, Departamento de Política Económica
  • Joost Heijs Universidad Complutense de Madrid, Departamento de Economía Aplicada, Estructura e Historia


This work provides evidence of the effect of innovation on employment in two countries where this impact has not been previously analysed: Mexico and Ecuador. Following the method proposed by Harrison et al. (2014), we find that introducing new products in the market positively affects employment in Mexico and Ecuador. While process innovation tends to destroy jobs in Mexico, it has no effect in the case of Ecuador. The positive impact of product innovation is observed to be greater than the loss of employment caused by process innovation.


Product and process innovation, labor demand, labor productivity