Ratio Working Paper No. 340: Job Creation in the Wind Power Sector Through Marshallian and Jacobian Knowledge Spillovers

Abstract

The empirical evidence concerning the job-creation impact of wind power technology through knowledge spillovers is yet poor. Our objective is to contribute to the literature and bridge this gap. Specifically, our analysis explores to what extent investments in innovation activities of one firm affect the neighbouring firms’ generation of knowledge spillovers in the same sector (intra-industry) or to different sectors (inter-industry) and how this complex knowledge diffusion process impacts the employment dynamics. The econometric analysis relies on a sector-based panel dataset for the USA, Europe, and Japan between 2002 and 2017. The empirical findings suggest that there were negative employment spillovers from the same technology sector (Marshallian externalities) while the spillovers from more diversified activity (Jacobian externalities) have a positive impact on job-creation. The findings have relevant policy implications for governments who are developing an industrial strategy for wind power technology.