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Host Country Educational Attainment and Vertical Specialization

Listed author(s):
  • Clark Don P.

    ()

    (University of Tennessee)

Integration of the global economy through trade has enabled firms to adopt new production strategies. Rather than producing in a single country, stages of production are performed in multiple countries to exploit inherent locational advantages. This practice gives rise to vertical specialization across national boundaries. Here, the U.S. exports components to a foreign (host) country that uses them to produce a product that is returned to the U.S. or is exported to other countries. This paper investigates the relationship between host country educational attainment and the extent of vertical specialization. Despite the general finding that educational attainment exerts a decreasingly negative effect on such activity in host countries, a detailed analysis suggests there may be a positive relationship between educational attainment and vertical specialization over some parts of the educational attainment scale. A country can become more attractive as a production location when its workforce is educated.

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Article provided by De Gruyter in its journal Global Economy Journal.

Volume (Year): 8 (2008)
Issue (Month): 2 (June)
Pages: 1-20

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Handle: RePEc:bpj:glecon:v:8:y:2008:i:2:n:4
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  1. Helleiner, Gerald K, 1973. "Manufactured Exports from Less-Developed Countries and Multinational Firms," Economic Journal, Royal Economic Society, vol. 83(329), pages 21-47, March.
  2. David L. Hummels & Jun Ishii & Kei-Mu Yi, 1999. "The nature and growth of vertical specialization in world trade," Staff Reports 72, Federal Reserve Bank of New York.
  3. Barro, Robert J & Lee, Jong Wha, 1996. "International Measures of Schooling Years and Schooling Quality," American Economic Review, American Economic Association, vol. 86(2), pages 218-223, May.
  4. James R. Markusen, 1995. "The Boundaries of Multinational Enterprises and the Theory of International Trade," Journal of Economic Perspectives, American Economic Association, vol. 9(2), pages 169-189, Spring.
  5. Don Clark, 2006. "Country and industry-level determinants of vertical specialization-based trade," International Economic Journal, Taylor & Francis Journals, vol. 20(2), pages 211-225.
  6. Helpman, Elhanan, 1987. "Imperfect competition and international trade: Evidence from fourteen industrial countries," Journal of the Japanese and International Economies, Elsevier, vol. 1(1), pages 62-81, March.
  7. Joe Stone & Hyun-Hoon Lee, 1995. "Determinants of intra-industry trade: A longitudinal, cross-country analysis," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 131(1), pages 67-85, March.
  8. David L. Hummels & Dana Rapoport & Kei-Mu Yi, 1998. "Vertical specialization and the changing nature of world trade," Economic Policy Review, Federal Reserve Bank of New York, issue Jun, pages 79-99.
  9. Feenstra, Robert C & Hanson, Gordon H, 1996. "Globalization, Outsourcing, and Wage Inequality," American Economic Review, American Economic Association, vol. 86(2), pages 240-245, May.
  10. Zhang, Kevin Honglin & Markusen, James R., 1999. "Vertical multinationals and host-country characteristics," Journal of Development Economics, Elsevier, vol. 59(2), pages 233-252, August.
  11. Clark, Don P., 1992. "Non-Tariff Measures And Industrial Nation Imports Of Agricultural Products," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 24(01), pages 225-232, July.
  12. Don Clark & Marchese Serafino & Zarrilli Simonetta, 2000. "Do Dirty Industries Conduct Offshore Assembly In Developing Countries?," International Economic Journal, Taylor & Francis Journals, vol. 14(3), pages 75-86.
  13. Clark, Don P., 1992. "Non-Tariff Measures And Industrial Nation Imports Of Agricultural Products," Southern Journal of Agricultural Economics, Southern Agricultural Economics Association, vol. 24(01), July.
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