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The Structure Of Firm R&D, The Factor Intensity Of Production, And Skill Bias

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Author Info
James D. Adams

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Abstract

This paper explores the effect of research and development (R&D) and capital on factor intensity and skill bias in a sample of manufacturing plants. Firm and industry R&D as well as plant level capital increase the factor intensity of labor over materials. In contrast, skill bias originates in portions of capital and R&D. Equipment capital and firm R&D in the same product as a plant are consistently skill biased, while structures are biased against skill. Furthermore, general firm and industry R&D increase investment in equipment but not structures. This shows that the skill bias of R&D occurs through two distinct channels. First, firm R&D specific to the product increases the relative demand for skilled labor directly and in the short run through the cost function. Second, general firm and industry R&D exert an additional skill bias by favoring equipment over structures in the long run, demonstrating the broader compass of the skill bias of R&D over time. © 2000 by the President and Fellows of Harvard College and the Massachusetts Institute of Technolog

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Publisher Info
Article provided by MIT Press in its journal The Review of Economics and Statistics.

Volume (Year): 81 (1999)
Issue (Month): 3 (August)
Pages: 499-510
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Handle: RePEc:tpr:restat:v:81:y:1999:i:3:p:499-510

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Web page: http://mitpress.mit.edu/journals/

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  1. Carstensen, Vivian, 2002. "Reorganization of Firms and Productivity: A Treatment Effects Approach," Diskussionspapiere der Wirtschaftswissenschaftlichen Fakultät der Universität Hannover dp-257, Universität Hannover, Wirtschaftswissenschaftliche Fakultät. [Downloadable!]
  2. Mariacristina Piva & Marco Vivarelli, 2002. "The Skill Bias: comparative evidence and an econometric test," International Review of Applied Economics, Taylor and Francis Journals, vol. 16(3), pages 347-357, July. [Downloadable!] (restricted)
  3. Piva, Mariacristina & Santarelli, Enrico & Vivarelli, Marco, 2003. "The Skill Bias Effect of Technological and Organisational Change: Evidence and Policy Implications," IZA Discussion Papers 934, Institute for the Study of Labor (IZA). [Downloadable!]
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  4. Mariacristina Piva & Enrico Santarelli & Marco Vivarelli, 2004. "Technological and Organizational Changes as Determinants of the Skill Bias: Evidence from a Panel of Italian Firms," Papers on Entrepreneurship, Growth and Public Policy 2004-03, Max Planck Institute of Economics, Entrepreneurship, Growth and Public Policy Group. [Downloadable!]
  5. James Adams, 2006. "Learning, internal research, and spillovers †," Economics of Innovation and New Technology, Taylor and Francis Journals, vol. 15(1), pages 5-36, January. [Downloadable!] (restricted)
  6. Mariacristina Piva & Marco Vivarelli, 2001. "The skill bias in Italy: a first report," Economics Bulletin, Economics Bulletin, vol. 15, pages 1-8. [Downloadable!]
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