The same relationship holds over just the non-OECD developing countries for the regressions estimated over the combined group of process and product innovators, and over product innovators, as reported in table 5, although the differences are not as large as for the sample of all countries. The coefficient on the share of the unskilled workforce across all firms is 8.2. When the estimation is run on sub-samples that are split by innovation status, the coefficient is again larger for the group of firms with either process or product innovations (9.1) than it is for non-innovators (6.8). For the sub-sample of only process innovators, the coefficient is estimated to be 7.6, versus 8.2 for non-process innovators. Comparing the sub-samples split by product innovation, the coefficient is 9.4 for innovators versus 7.6 for non-innovators.

One additional dimension of inclusiveness that we can demonstrate with our enterprise data is the participation by the female workforce in innovation-driven growth. Across all countries, innovative firms hire larger shares of female workers than non-innovative firms: the mean employment share of female workers by innovative firms (the combined group of process and product innovators) is 29%, versus 22% for non-innovative firms.<sup>27</sup> In the employment growth rate regressions of tables 4 and 5, the positive contributions of the share of female employees to employment growth associated with innovation are statistically significant (at the 5 and 10% levels, respectively) for the combined group of process and product innovators, but not for non-innovators. Our findings suggest that a 10 percentage point increase in the share of female workers at an establishment is associated with an employment growth rate that is twotenths of a percentage point higher. Based on findings reported in tables 2 and 3, female participation contributes significantly to employment growth for young and medium-size firms across all countries, and across the non-OECD developing countries where this relationship is estimated to be more than twice the magnitude of the same relationship when it is estimated for the sample of all firms.

Finally, it is stimulating to note that when the enterprise level wage rate is introduced as an additional variable into the regression specifications reported in tables 4 and 5, there is a significant negative association between the average annual wage levels and the employment growth rates for the non-innovating firms. In contrast, there is no significant correlation between wage levels and employment growth rates for both process and product innovators. These correlations reflect only intra-national differences, due to the national fixed effects variables. While these differences might arise from exogenous intra-national regional variations in wage rates, inasmuch as they arise instead from differences among the jobs filled by the enterprises themselves, the resulting regressions are unsuitable for testing hypotheses about the impacts of wages on employment. Nevertheless, the estimation results are consistent with the hypothesis that innovative enterprises can afford to employ more in a manner insensitive to wage costs, due apparently to their enhanced opportunities to cover those costs with innovation-driven growth,

> 27 The null hypothesis that the means are the same across the two sub-samples is rejected at the 1% level of significance, based on a two-sample t-test.

19