Finance Theses and Dissertations

Permanent URI for this collection

Now showing 1 - 1 of 1

Open Access
How Do Technological Innovations Affect Corporate Investment and Hiring?
(University of Oregon, 2020-09-24) Liu, Ying; Julio, Brandon
Using various measures for technological innovation, I show that corporate investment and hiring go up following technological advancements. The effect is stronger for firms with more industry- or firm-level innovations, among firms with lower capital intensity or greater marginal benefits from innovative outputs. In addition, firm-level production efficiency increases following innovations, with this effect concentrated among firms with greater industry- or firm-level innovative activity. Further, although cross-sectional heterogeneity exists, the firm-level capital-to-labor ratio does not increase significantly. Supporting the view of endogenous growth theory that firms with successful innovations tend to expand, these findings highlight the possible channels for innovations to propagate in the economy. These results also suggest, although making firms more efficient, technology does not reduce employment, suggesting technological innovations are, to some extent, Hicks-neutral.