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Technology, MNEs activity and Italian skill upgrading

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  • Mara GRASSENI

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Abstract

This paper analyses empirically whether skill-biased technological change and foreign direct investment play a role in explaining the skill-upgrading in Italian manufacturing industry during the 1990s. To test this issue I use, simultaneously, industry level data from two groups of firms: foreign owned firms and Italian multinational firms investing abroad. But while the results do not find evidence of skill upgrading transmitted through R&D effort undertaken by Italian parents, they support the hypothesis of a positive role played by the group of foreign owned firms. This result is confirmed especially in low-tech sectors. However, this positive impact may be partially or completely offset if the share of inward FDI activity increases over a certain threshold. The empirical evidence does not provide support that the R&D effort undertaken in high-tech sectors by each group of firms has influence on Italian skill upgrading

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Paper provided by Department of Economics, Management and Quantitative Methods at Università degli Studi di Milano in its series Departmental Working Papers with number 2004-25.

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Date of creation: 01 Jan 2004
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Handle: RePEc:mil:wpdepa:2004-25

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Keywords: Foreign Direct Investment; Skill Biased Technological Change; Skill Upgrading;

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  1. Manasse, Paolo & Stanca, Luca & Turrini, Alessandro, 2004. "Wage premia and skill upgrading in Italy: why didn't the hound bark?," Labour Economics, Elsevier, vol. 11(1), pages 59-83, February.
  2. Robert C. Feenstra & Gordon H. Hanson, 1996. "Globalization, Outsourcing, and Wage Inequality," NBER Working Papers 5424, National Bureau of Economic Research, Inc.
  3. Paolo Figini & Holger Görg, 1999. "Multinational companies and wage inequality in the host country: The case of Ireland," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 135(4), pages 594-612, December.
  4. Piva, Mariacristina & Vivarelli, Marco, 2003. "Innovation and Employment: Evidence from Italian Microdata," IZA Discussion Papers 730, Institute for the Study of Labor (IZA).
  5. Butler, Alison & Dueker, Michael, 1999. "Does foreign innovation affect domestic wage inequality?," Journal of International Economics, Elsevier, vol. 47(1), pages 61-89, February.
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