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Trade, Technology and Skills: Evidence from Turkish Microdata

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  • Elena Meschi

    ()
    (CEE, Institute of Education, University of London)

  • Erol Taymaz

    (Department of Economics, Middle East Technical University, Ankara)

  • Marco Vivarelli

    (Universita Cattolica del Sacro Cuore, Milano; Institute for the Study of Labour (IZA), Bonn; Max Planck Institute of Economics, Jena; Centre for the Study of Globalisation and Regionalisation (CSGR), Warwick University)

Abstract

In this paper we report evidence on the relationship between trade openness, technology adoption and the relative demand for skilled labour in the Turkish manufacturing sector, using firm level data over the period 1980-2001. In a dynamic panel data setting, using a unique database comprising data from 17,462 firms, we estimate an augmented cost share equation whereby the wage bill share of skilled workers in a given firm is related to international exposure and technology adoption. Both at the sectoral and firm level, it emerged that R&D expenditures are positive and significantly related to skill upgrading. This result supports the skill biased technological change argument in the case of a middle-income country such as Turkey. Moreover, the sectoral analysis revealed that increasing export towards more industrialised countries (mainly the E.U.) tends to shift the production toward less skill-intensive activities. While this result is consistent with the HOSS theorem, on the other hand import penetration from more developed countries turns out to facilitate the adoption of new technologies embodied in capital and intermediate goods, thus shifting the production toward more skill-intensive technologies. This result is confirmed by the firm level analysis that finds a positive impact of technological transfer from abroad, foreign ownership and export on the demand for skills, highlighting the role of increasing globalisation in fostering skill upgrading within firms. Our microdata also allowed us to investigate the direct impact of import flows in shaping the relative demand for skills. The results showed that those firms belonging to the sectors that most raised their inputs from more developed countries also experienced a higher increase in their labour cost share of skilled workers. This finding is a further support to the hypothesis that imports from industrialised countries imply a transfer of new technologies, in turn leading to a higher demand for skilled labour.

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Bibliographic Info

Paper provided by Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics in its series Jena Economic Research Papers with number 2009-097.

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Date of creation: 18 Nov 2009
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Handle: RePEc:jrp:jrpwrp:2009-097

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Keywords: globalization; technology transfer; skills; panel data; GMM-SYS;

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References

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Citations

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Cited by:
  1. Mauro Caselli, 2010. "Trade liberalisation, skill-biased technical change and wages in developing countries: a model with heterogeneous firms," Economics Series Working Papers CSAE WPS/2010-27, University of Oxford, Department of Economics.
  2. Mauro Caselli, 2014. "Trade, skill-biased technical change and wages in Mexican manufacturing," Applied Economics, Taylor & Francis Journals, vol. 46(3), pages 336-348, January.
  3. Vivarelli, Marco, 2012. "Innovation, Employment and Skills in Advanced and Developing Countries: A Survey of the Literature," IZA Discussion Papers 6291, Institute for the Study of Labor (IZA).
  4. Giuliano CONTI & Alessia LO TURCO & Daniela MAGGIONI, 2012. "Rethinking the import-productivity nexus for Italian manufacturing," Working Papers 381, Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali.
  5. repec:idb:brikps:61058 is not listed on IDEAS
  6. Petri, Böckerman & Seppo, Laaksonen & Jari, Vainiomäki, 2013. "Is there job polarization at the firm level?," MPRA Paper 50833, University Library of Munich, Germany.
  7. Ben Salha, Ousama, 2013. "Does economic globalization affect the level and volatility of labor demand by skill? New insights from the Tunisian manufacturing industries," Economic Systems, Elsevier, vol. 37(4), pages 572-597.
  8. Ramiro De Elejalde & David Giuliodori & Rodolfo Stucchi, 2013. "Employment and innovation: Firm level evidence from Argentina," ILADES-Georgetown University Working Papers inv291, Ilades-Georgetown University, Universidad Alberto Hurtado/School of Economics and Bussines.
  9. Srour, Ilina & Taymaz, Erol & Vivarelli, Marco, 2013. "Skill-Biased Technological Change and Skill-Enhancing Trade in Turkey: Evidence from Longitudinal Microdata," IZA Discussion Papers 7320, Institute for the Study of Labor (IZA).
  10. Crinò, Rosario, 2012. "Imported inputs and skill upgrading," Labour Economics, Elsevier, vol. 19(6), pages 957-969.
  11. Alessia LO TURCO & Daniela MAGGIONI, 2012. "Does trade foster employment growth in emerging markets? Evidence from Turkey," Working Papers 383, Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali.
  12. World Bank, 2013. "Turkey Green Growth Policy Paper : Towards a Greener Economy," World Bank Other Operational Studies 16088, The World Bank.
  13. Ilina Srour & Marco Vivarelli & Erol Taymaz, 2013. "Technological Change and Skill-based Employment Disparities: Evidence from Turkey," DISCE - Quaderni del Dipartimento di Scienze Economiche e Sociali dises1393, Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE).
  14. Bakis, Ozan & Polat, Sezgin, 2013. "Wage Inequality in Turkey: 2002-2010," GIAM Working Papers 13-9, Galatasaray University Economic Research Center.
  15. Haile, Getinet Astatike & Srour, Ilina & Vivarelli, Marco, 2013. "The Impact of Globalization and Technology Transfer on Manufacturing Employment and Skills in Ethiopia," IZA Discussion Papers 7820, Institute for the Study of Labor (IZA).
  16. Zouhair MRABET & Lanouar CHARFEDDINE, 2013. "Trade Liberalization, Technology Import And Employment: Evidence Of Skill Upgrading In The Tunisian Context," Region et Developpement, Region et Developpement, LEAD, Universite du Sud - Toulon Var, vol. 37, pages 11-36.

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