Industrial Employment Growth in Spanish Regions - the Role Played by Size, Innovation, and Spatial Aspects



4. Conclusions.

Two assumptions were made at the beginning of this article: first, there is a negative
relationship between the size of firms and their growth, especially in employment terms;
secondly, innovation plays a positive role in the growth of firms.

The assumptions have been tested using two different approaches: first of all, data from
seventeen Spanish regions have related their industrial employment growth with the share of
small firms and the presence of high and medium-high technological industries; secondly,
microdata have been selected in order to estimate the significance of size and innovation on
employment growth, also including regional variables for better explain the changes in
employment. All the data are referred to the period 1998-2002.

Size results at the regional level depend on the strictness of the assumption we assume: if we
state that “
industrialised regions with the highest share of small firms should be the regions
with the highest growth”
then the hypothesis is rejected. On the other side, if we affirm that
“regions with the highest share of small firms should be the regions with the highest growth,
independently of the industrialisation degree of the region”
then the conjecture is accepted in
employment terms but rejected if the growth variable is productivity.

At the same time, there is a very clear negative relationship between share of small firms and
the relevance of high and medium-high technological industries in Spanish regions. Then, the
assumption of a positive relationship between innovation activity and regional industrial
employment growth is also rejected.

Microeconomic level data support the assumptions made at the beginning of this study: Small
process innovating and young firms grow faster than old, large and non innovating firms.
Innovation also plays an important role in the survival of firms.

On the contrary, regional variables do not play any important role in survival or growth. Only
the share of industrial employment is significant in growth equation.

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