The Impact of Production Fragmentation on Industry Skill Upgrading: New Evidence from Japanese Manufacturing
AbstractThis paper examines the hypothesis that industries engaged in international fragmentation of production experience greater skill upgrading using a panel dataset of Japanese manufacturing over the period 1980-2000. The novelty of the study comes from the use of an index newly constructed using data on trade in parts and components to measure inter-industry variations in the degree of international vertical specialization (fragmentation intensity of trade). It also employs a methodology designed to embody peculiarities of Japan's fragmentation trade pattern. While the findings of existing studies are inconclusive, we find that the expansion of fragmentation trade with developing East Asian countries has had a significant impact on the skills composition of Japanese manufacturing employment. By contrast, trade with high income countries seems to have had a skill downgrading effect.
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Bibliographic InfoPaper provided by Institute of Economic Research, Hitotsubashi University in its series Hi-Stat Discussion Paper Series with number d06-202.
Date of creation: Jan 2007
Date of revision:
International Fragmentation of Production; Skill Upgrading; Japanese Manufacturing;
Find related papers by JEL classification:
- F14 - International Economics - - Trade - - - Empirical Studies of Trade
- 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
This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-01-28 (All new papers)
- NEP-BEC-2007-01-28 (Business Economics)
- NEP-INT-2007-01-28 (International Trade)
- NEP-SEA-2007-01-28 (South East Asia)
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- Sanghoon Ahn & Kyoji Fukao & Keiko Ito, 2008.
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