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International Technology Diffusion and the Demand for Skilled Labor: Evidence from East Asia and Latin America

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Author Info
Ana Margarida Fernandez
Pablo Fajnzylber
Abstract

This paper presents new plant-level evidence on the effects of access to international technology diffusion on the demand for skilled workers using data from Investment Climate Surveys performed by the World Bank in Asia and Latin America. Our findings suggest that in Brazil, China and Malaysia foreign direct investment and technology licensing are associated with greater demand for skilled labor, probably because they act as a channel for the diffusion of skilled biased technology developed in industrialized countries. In contrast, exports are negatively related to the demand for skilled workers in China and Malaysia, and to a lesser extent in Brazil, which is consistent with international sales leading to a greater degree of specialization according to the countries' comparative advantage in unskilled labor intensive goods. Finally, imported inputs lead to greater demand for skilled workers in Brazil and Malaysia but the opposite occurs in China, reinforcing the possibility that the specialization of Chinese plants in the production of goods intensive in the use of unskilled labor has more than countervailed the greater access to foreign technology potentially associated with international sales.

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Paper provided by Econometric Society in its series Econometric Society 2004 Latin American Meetings with number 290.

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Date of creation: 11 Aug 2004
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Handle: RePEc:ecm:latm04:290

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Related research
Keywords: skilled labor; technology diffusion; foreign direct investment; exports;

Find related papers by JEL classification:
F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
O33 - Economic Development, Technological Change, and Growth - - Technological Change - - - Technological Change: Choices and Consequences; Diffusion Processes

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  15. Berman, Eli & Bound, John & Griliches, Zvi, 1994. "Changes in the Demand for Skilled Labor within U.S. Manufacturing: Evidence from the Annual Survey of Manufactures," The Quarterly Journal of Economics, MIT Press, vol. 109(2), pages 367-97, May. [Downloadable!] (restricted)
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  20. Feenstra, Robert C. & Hanson, Gordon H., 1997. "Foreign direct investment and relative wages: Evidence from Mexico's maquiladoras," Journal of International Economics, Elsevier, vol. 42(3-4), pages 371-393, May. [Downloadable!] (restricted)
    Other versions:
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