Labor Training and Foreign Direct Investment

Evidence shows that most foreign direct investment (FDI) flows from developed to developed countries (North–North) in skilled labor‐intensive industries. This paper builds a model that incorporates labor training into the proximity–concentration tradeoffs to analyze the entry mode of multinationals to a foreign country. Production requires both skilled labor and unskilled labor.. A multinational pursuing FDI needs to provide training to some workers in the host country to equip them with skills that are specific to the production of the firm. Labor training and skill specificity lead to contract friction. It is shown that in skilled labor‐intensive industries, FDI increases along with the economic development level of the host country, whereas in unskilled labor‐intensive industries, the reverse is true. This paper provides a theoretical explanation for the empirical findings on the prevalence of North–North FDI in skilled labor‐industries and North–South FDI in unskilled labor‐intensive industries.     

Trade and the Transmission of Technology

This paper integrates earlier studies on the link of productivity and research and development (R&D) in different industries of a closed economy with the more recent emphasis on R&D-driven growth and international trade in open economies. In this framework, technology in the form of product designs is transmitted to other industries, both domestically as well as internationally, through trade in differentiated intermediate goods. I present empirical results based on a new industry-level data set that covers more than 65 percent of the worlds manufacturing output and most of the worlds R&D expenditures between 1970 and 1991. The analysis considers productivity effects from R&D in the domestic industry itself, from R&D in other domestic industries, as well as in the same and other foreign industries. I estimate strong productivity effects both from own R&D spending and R&D conducted elsewhere. The contribution of R&D in the industry itself is about 50 percent in this sample. Domestic R&D in other industries is the source of 30 percent of the productivity increases, and the remaining 20 percent are due to R&D expenditures in foreign industries.     

Risky business: Institutions vs. social networks in FDI

Political economy scholarship on foreign direct investment (FDI) emphasizes variation in host country political risk but overlooks variation in investors' sensitivity to political risk. We show that relational contracting, relationship‐based contract enforcement, is more efficient for high‐risk, human capital‐intensive activities for which the costs of writing legally enforceable contracts are prohibitive. We disaggregate FDI into two distinct varieties: mergers and acquisitions (M&A) and venture capital (VC). We propose that VC flows are less sensitive to host institutions but correlate strongly with skilled migrant networks that monitor compliance and impose reputational costs. Our empirical analysis of dyadic VC and M&A flows covers over 100 countries during 1980–2009. We address other mechanisms through which migrant networks facilitate FDI and verify our results hold at the country‐industry level. These findings suggest that relational contracting facilitates global integration of dynamic, knowledge‐intensive industries even when formal institutions are weak.     

Trans-boundary Pollution and Brain Drain Migration

The economic effects of international brain drain migration in the presence of trans‐boundary pollution are analyzed. In autarky, both skilled and unskilled workers are expected to migrate from the less developed foreign country to the developed home country, if permitted. Surprisingly, under certain conditions, all workers, apart from skilled foreign ones, will gain (lose) from the migration of unskilled (skilled) foreign workers. Moreover, if skilled foreign workers are employed as unskilled domestic workers, then skilled foreign workers will gain but unskilled workers in both countries will lose. Whether or not skilled domestic workers will gain depends on the magnitude of the pollution spillover parameter. Brain drain migration persists under free trade if the demand for manufactured goods is strong.     

要素密集度、劳动报酬与中国制造业价值链上游化

基于41个经济体、35个行业及1995-2011年WIOD数据库,对中国制造业在全球价值链中的位置进行测度,将要素密集度和劳动报酬分别细化为3个变量,结合中国制造业投入产出价值链关联指数,对中国制造业价值链上游化影响因素进行分析,得出如下结论：3个技术层次劳动者报酬中,中国制造业价值链上游化与中技术劳动报酬正相关,在1%水平下非常显著,说明提高中技术劳动者报酬有利于中国制造业价值链上游化;要素密集度中,cap2（资本存量与工资总额的比值）对中国制造业价值链上游化的影响在1%水平下非常显著,说明资本存量相对工资总额越大,越有利于中国制造业价值链上游化;基于投入的价值链关联指数和基于产出的价值链关联指数对中国制造业价值链上游化均在1%水平下具有显著的积极作用。最后,提出通过“双轨制”教育,增加中技术劳动者数量,制定制造业细分行业政策和大力发展生产性服务业等3个方面的政策建议。     

Earnings differences in the labor market of the Arab Gulf states: The case of Kuwait

The Arab Gulf states of Kuwait, Bahrain, the United Arab Emirates, Saudi Arabia and Qatar have been experiencing common trends of growth and development. The shared features include a large and expanding government sector, ambitious development programs, high standards of welfare and income and high dependence on migrant workers. Without the expatriate manpower it would have been virtually impossible for the economies of these countries to implement their development programs. Yet the presence of expatriates has a direct impact on the size distribution of labor income. Using the rich data of the 1972/73 budget survey this paper shows that the distribution of labor income is more equitable within the indigenous labor force, i.e., Kuwaitis, than within the migrant workers who come from different environments and have varied experiences and educational attainments. The institutional rules prevailing in Kuwait, as well as other Arab Gulf States, discriminate against migrant workers. The paper shows that about 50% of the wage difference between Kuwaiti and non-Kuwaiti workers is due to discriminatory practices in the labor market. In view of the projected increase in demand for foreign workers in the Arab Gulf States, policy makers are in urgent need of manpower planning and a reconsideration of their discriminatory policies against foreign workers.     

Exports, Returns to Scale, and Total Factor Productivity: The Case of Taiwanese Manufacturing Industries

The paper examines the relevance of international scale economies and international market efficiency of trade based on the firm-level data of Taiwanese manufacturing industries. The author first constructs a simple analytical framework to measure the extent of scale economies and total factor productivity for each firm. The measurements of scale economies and total factor productivity are then used to investigate the relationships among exports, scale economies, and productivity. Significant external scale economies associated with exports and a strong positive relationship between the individual firm's productivity and its own export intensity are observed.     

International Outsourcing and the Sector Bias: New Empirical Evidence

Considering labor market effects of international outsourcing on more disaggregated industry levels, a sector bias appears showing that low skilled labor receives a wage premium when international outsourcing takes place in low skill‐intensive industries. However, there is no empirical evidence supporting this pattern. Applying a panel data analysis for Germany, this paper provides new empirical evidence for the existence of the sector bias of international outsourcing: significant results confirm the decreasing wage gap if international outsourcing takes place in low skill‐intensive industries. If international outsourcing takes place in high skill‐intensive industries, the wage gap increases.     

Technology Adoption,Export Status,and Skill Upgrading: Theory and Evidence

This paper develops a model of trade that features heterogeneous firms, technology choice and different types of skilled labor in a general equilibrium framework to explain within‐industry increase in the relative demand for skilled workers. Its main contribution is to investigate the impact of firms' export and technology choice decisions on skill upgrading. Only firms in the upper range of the productivity distribution produce for the foreign market using high‐technology. Since this technology is skilled‐biased, exporters that resort to modern technologies are more skill intensive. Empirical evidence is also provided to support the model's main predictions using plant‐level panel data from Chile's manufacturing sector (1990–1999).     

Tariff Elimination and the Wage Gap in an Industrial Specific Factors Model*

A specific factors model of 458 US manufacturing industries simulates the effects of eliminating manufacturing tariffs on unskilled and skilled wages. The model assumes constant elasticity substitution, industry‐specific capital inputs, and mobile unskilled and skilled labor. Tariff elimination slightly lowers both unskilled and skilled wages, and increases the skilled wage gap. Industry outputs and capital returns absorb the negative impact of the falling tariffs with losses concentrated in more highly protected industries and most industries enjoying small positive outcomes.     

数字化对制造业全球价值链竞争力的影响——来自中国制造业行业的经验证据

数字化是新时期提升制造业GVC竞争力的有效路径。系统梳理数字化影响制造业GVC竞争力的理论机制,并利用2000—2014年中国制造业面板数据进行实证检验。结果表明,制造业数字化通过成本效应、配置效应和协同效应促进GVC竞争力提升;样本考察期内,中国制造业GVC竞争力整体呈不断上升趋势,且基本稳定在前10行列,并以中低知识密集度行业竞争力最强;数字化整体上有利于GVC竞争力提升,分行业看,数字化对中低和中高知识密集度行业的GVC竞争力有显著促进作用;分投入来源看,国际数字化投入比国内数字化投入的促进效果更显著;分投入类型看,软件和信息技术服务业的促进效果最突出。结论可为制造企业制定数字化转型及GVC竞争力提升策略提供参考。     

基于行业细分的我国制造业就业技能结构影响因素研究

技术进步对就业结构具有重要影响,其中技能偏态型技术进步对就业技能结构的影响尤为突出。本文选取2001—2010年间我国制造业29个细分行业的经济发展数据,分别考察了市场主导型FDI技术溢出、出口主导型FDI技术溢出、企业研发等因素对我国制造业就业技能结构的影响。研究结果表明,市场主导型FDI技术溢出仅对中低技术行业的就业技能结构具有负的影响,而出口主导型FDI带来的技术溢出对高技术行业和中低技术行业就业技能结构均有显著的正向作用。同时,企业规模的扩大和资本深化程度的增加将降低制造业高技术劳动力的占比,而企业自身研发投入的加强将明显提升制造业的就业技能结构。     

Brain drain,illegal migration and capital exports from less developed economies: a neoclassical approach

This model shows that LDC's brain drain triggers emigration of unskilled labor and capital exports, skilled workers and agricultural capitalists gain, unskilled workers and industrial capitalists lose, and demodernization of the economy results. Demodernization of the economy occurs when labor force and output of the industrial sector decrease, and employment and production in agriculture increase. The problem analyzed in this model is what happens to the incomes of those who are left behind when some of the skilled workers migrate abroad. The results show that with the exodus of both skilled labor and capital, the marginal productivity of unskilled workers in industry also falls below the unskilled wage. Although one would expect a brain drain to result in gains for those skilled workers who remain in the source country, and for the capital owners who receive unskilled workers as a result of emigration, the losers are the unskilled workers and the capitalists in the sector where the migrants worked.     

Has Labor Income Become More Volatile? Evidence from International Industry‐Level Data

Changes in labor market institutions and the increasing integration of the world economy may affect the volatility of capital and labor incomes. This article documents and analyzes changes in income volatility using data for 11 industrialized countries, 22 industries and 35 years (1970–2004). The article has four main findings. First, the unconditional volatility of labor income has declined in parallel to the decline in macroeconomic volatility. Second, the industry‐specific, idiosyncratic component of labor income volatility has hardly changed. Third, cross‐sectional heterogeneity is substantial. If anything, the labor incomes of high‐ and low‐skilled workers have become more volatile relative to the volatility of capital incomes. Fourth, the volatility of labor income relative to the volatility of capital income declines in the labor share. Trade openness has no clear‐cut impact.     

Extensive and Intensive Margins of Exports and Labor Heterogeneity

This paper investigates how changes in skilled and unskilled labor supply affect different margins of exports. Using bilateral trade data in manufacturing sectors of 34 countries from 1995 to 2010, we find that most of the impact of skilled labor on exports goes through the intensive margin, whereas most of the effect of unskilled labor works through the extensive margin. These outcomes result from the impact of labor skill composition on the productivity cut‐off of exporters. We also find that the impact of skilled and unskilled labor on trade margins depends on the income level of countries and on the type of products. The results indicate that the effect of skilled labor is greater for low‐income countries and differentiated products, while that of unskilled labor is greater for high‐income countries and homogeneous products.     

Global labour markets,return, and onward migration

Abstract. There is increasing evidence that international migration is characterized by frequent return and onward migration. This has important consequences for the contribution of immigrants to the economy of the host country. Lack of longitudinal data has prevented much analysis of how frequently international migration involves a sequence of location decisions or how long the typical migrant stays in a host country. A newly available longitudinal data set covering all immigrants to Canada since 1980 provides the opportunity to address these issues. The results show that a large fraction of male immigrants who are of working age, especially among skilled workers and entrepreneurs, are highly internationally mobile.     

企业规模异质性与产业集聚：来自中国制造业的证据

基于中国制造业数据,本文检验了企业规模异质性与制造业地理集中的互动联系。研究表明企业规模因素对制造业地理集中具有显著影响。按素密集度对制造业的分类回归进一步表明,上述影响存在行业差异：劳动力与资源密集型行业的相关性不稳健,但资本技术密集型行业的结果是稳健的。这意味着资本技术密集型行业的企业规模分布具有地理集中倾向：大市场集中分布了更多大规模企业。这一结论表明制造业集聚具有规模异质性：小规模企业通过集聚经济,促进生产率提高形成制造业集聚,大规模企业则通过集中分布在大市场而形成制造业集聚。另外,从制造业集聚的驱动力量看,制造业集聚的强化效应与地区异质因素两股力量都在推动制造业地理集中,由此可以判断制造业集中趋势还将持续。     

The effects of offshoring to low-wage countries on domestic wages: a worldwide industrial analysis

This paper extends the literature on the implications of offshoring for labour markets by investigating its effect on the wages of different skill groups in a broad global context. The analysis draws on input–output data from the WIOD project, and in the panel analysed (13 manufacturing industries, 40 countries, 1995–2009) we account for up to 96 % of the international trade in manufacturing inputs. Being particularly interested in the wage effects of offshoring to low-wage countries (LWC), we use precise LWC classifications (varying across industries and time) to decompose overall offshoring by source country. We use a decomposition of the conventional offshoring measure in order to capture its pure international component, which is further instrumented using a gravity-based strategy. According to the estimation results, the negative impact of offshoring on wages mainly concerns low and medium skilled workers. However, in terms of magnitude, the downward pressure on domestic wages exhibited by offshoring to LWC is relatively small.     

Economic Reform and Total Factor Productivity Growth in Indian Manufacturing Industries

A stochastic frontier production function model is applied to Indian manufacturing industries, to decompose the sources of total factor productivity growth into technical progress, technical efficiency, scale efficiency, and allocative efficiency. Empirical results based on data from 2000 to 2006 suggest that increased investment needs time to deliver increased productivity and efficiency, because new technology combined with fresh investment requires higher numbers of skilled workers, better managerial practices and an advanced input mix, all of which generally take time to develop. Thus, the Indian economy must boost technical efficiency by providing skilled workers and high quality managers to further economic reform.     

服务贸易壁垒对制造业GVC升级的影响研究：基于跨国面板数据的实证分析

文章基于服务贸易壁垒与制造业服务化的矛盾分析了遭受服务贸易壁垒对制造业global value chains(GVC)升级的影响,并利用2000—2014年的跨国面板数据进行实证检验,得出如下结论:第一,遭受服务贸易壁垒会阻碍制造业GVC升级,降低制造业参与GVC分工的程度,缩短制造业在全球价值链中的生产长度,且遭受服务贸易壁垒会阻碍制造业在GVC中地位的提升,增加制造业出口产品中国内增加值的使用,减少国外增加值的使用;第二,遭受服务贸易壁垒对发展中国家影响大于发达国家,对中高技术行业的影响大于中低计划行业.分要素密集度行业来看,遭受服务贸易壁垒对前向参与GVC生产活动的影响程度大小顺序为:技术密集型行业>资本密集型行业>劳动密集型行业,对后向参与GVC生产活动的影响程度大小顺序为:资本密集型行业>技术密集型行业>劳动密集型行业.