IDEAS home Printed from https://ideas.repec.org/a/eee/ecanpo/v86y2025icp673-691.html
   My bibliography  Save this article

Imported intermediate goods embedded technology and intra-firm skill premiums

Author

Listed:
  • Wang, MingRong
  • Liu, XinYue

Abstract

With China’s increasing integration into the global value chain, the technology embedded in imported intermediate goods has emerged as a pivotal factor influencing the skill premium within enterprises by altering the allocation of skilled and unskilled labor inputs in domestic firms. This study leverages merged data from the World Input–Output Database (WIOD), the Chinese Industrial Enterprise Database, and the customs database to empirically investigate the impact of technology embedded in imported intermediate goods on the overall and “dual” skill premiums within Chinese enterprises through the mechanism of intermediate goods industry upgrading. In this context, the overall skill premium denotes the wage disparity between skilled and unskilled labor within enterprises. The “dual” skill premium encompasses both within-group and between-group components. The between-group skill premium arises from discrepancies in observable attributes (e.g., educational attainment, productive efficiency), whereas the within-group skill premium stems from the heterogeneity of unobservable factors (e.g., capabilities, aptitudes) among individuals with identical observable characteristics. The findings reveal that the technology embedded in imported intermediate goods exerts a significant and robust dampening effect on both the overall and “dual” skill premiums within enterprises, with a more pronounced reduction in the within-group skill premium compared to the between-group skill premium. This dampening effect exhibits significant heterogeneity across production sectors, enterprise skill premium quantiles, ownership types, and industry upstreamness. Mechanism tests indicate that the technology embedded in imported intermediate goods reduces the overall and “dual” skill premiums within enterprises by inhibiting the upgrading of domestic intermediate goods industries. The conclusions of this study provide crucial empirical evidence and policy insights for coordinating the high-quality development of intermediate imported goods trade and refining the income distribution system.

Suggested Citation

  • Wang, MingRong & Liu, XinYue, 2025. "Imported intermediate goods embedded technology and intra-firm skill premiums," Economic Analysis and Policy, Elsevier, vol. 86(C), pages 673-691.
    • Handle: RePEc:eee:ecanpo:v:86:y:2025:i:c:p:673-691
    DOI: 10.1016/j.eap.2025.03.051
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0313592625001249
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.eap.2025.03.051?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:ecanpo:v:86:y:2025:i:c:p:673-691. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.journals.elsevier.com/economic-analysis-and-policy .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.