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Sectoral Technical Progress and Aggregate Skill Formation

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  • Saibal Kar
  • Chaitali Sinha

Abstract

Recent studies discuss micro-transmission mechanisms to measure spillover effects of MNC (Multinational Corporations) activity on human capital in host countries. We develop an aggregate transmission mechanism to show that technology deepening in advanced sectors affect economy-wide skill formation, not analyzed in previous studies. Sector-specific advanced technological input and borrowing from local capital market at preferential rates dampens rate of skill formation if local firms are more skill-intensive. Liberal trade policies applied only to MNC sector may lower traditional export if credit subsidy offered to MNCs is simultaneously withdrawn. Copyright Springer Science+Business Media New York 2014

Suggested Citation

  • Saibal Kar & Chaitali Sinha, 2014. "Sectoral Technical Progress and Aggregate Skill Formation," Journal of Industry, Competition and Trade, Springer, vol. 14(2), pages 159-172, June.
    • Handle: RePEc:kap:jincot:v:14:y:2014:i:2:p:159-172
    DOI: 10.1007/s10842-013-0152-2
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    More about this item

    Keywords

    Skill; MNCs; Technology; Trade policy; Developing countries; F11; F23; J24;
    All these keywords.

    JEL classification:

    • F11 - International Economics - - Trade - - - Neoclassical Models of Trade
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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