IDEAS home Printed from https://ideas.repec.org/p/diw/diwwpp/dp1522.html
   My bibliography  Save this paper

Cross-Country Estimates of Employment and Investment in Organisational Capital: A Task-Based Methodology Using the PIAAC Database

Author

Listed:
  • Marie Le Mouel
  • Mariagrazia Squicciarini

Abstract

This work proposes a task-based methodology for the measurement of employment and investment in organisational capital (OC) in 20 OECD countries. It builds on themethodology of Squicciarini and Le Mouel (2012) and uses information from the OECD Programme for the International Assessment of Adult Competencies (PIAAC). OCis defined as firm-specific organisational knowledge resulting from the performance of tasks affecting the long-term functioning of firms, such as developing objectives and strategies; organising, planning and supervising production; and managing human resources. Occupations contributing to the generation of OC are identified using distribution-based criteria and clustering analysis. Cross-country heterogeneity in OC-related occupations emerges: while 20 occupational classes of the International Standard Classification of Occupations (ISCO 2008) are on average identified as being OC-related, country-specific values range between 14 (in Korea) and 24 occupations (in Poland). A core group of managerial occupations are consistently identified as OC occupations across countries, whereas differences arise in the selection of professionals and associate professionals in science and engineering, health, education, and business administration. In-house investment in OC for the 2012 is measured à la Corrado, Hulten and Sichel (2009), as 20% of wages paid to OC-related occupations. Estimates at the aggregate level suggest the share of OC occupations in total employment to represent between 9.5% (Denmark) to 26% (United Kingdom), with an average of 16%. Total investment in OC, as a share of value-added, ranges from 1.4% in the Czech Republic to 3.7% in the United Kingdom, with an average 2.2% across all countries. Managers appear to account for less than half of total employment and investment in OC, and total investment in OC is higher in services than in manufacturing. Experimental estimates of investment in OC by firm class size and by the private and public sector and are also proposed. In the services sector, small firms account for on average half of OC investment in that sector, while in manufacturing, 45% of OC investment comes from large firms. Finally, with only few exceptions, investment in OC appears to be higher in the public sector than in the private sector.

Suggested Citation

  • Marie Le Mouel & Mariagrazia Squicciarini, 2015. "Cross-Country Estimates of Employment and Investment in Organisational Capital: A Task-Based Methodology Using the PIAAC Database," Discussion Papers of DIW Berlin 1522, DIW Berlin, German Institute for Economic Research.
    • Handle: RePEc:diw:diwwpp:dp1522
    as

    Download full text from publisher

    File URL: https://www.diw.de/documents/publikationen/73/diw_01.c.520538.de/dp1522.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. J. Behrman & T.N. Srinivasan (ed.), 1995. "Handbook of Development Economics," Handbook of Development Economics, Elsevier, edition 1, volume 3, number 4.
    2. Lisa E. Cohen, 2013. "Assembling Jobs: A Model of How Tasks Are Bundled Into and Across Jobs," Organization Science, INFORMS, vol. 24(2), pages 432-454, April.
    3. Sandra E. Black & Lisa M. Lynch, 2001. "How To Compete: The Impact Of Workplace Practices And Information Technology On Productivity," The Review of Economics and Statistics, MIT Press, vol. 83(3), pages 434-445, August.
    4. Nicholas Bloom & Christos Genakos & Raffaella Sadun & John Van Reenen, 2011. "Management Practices Across Firms and Countries," CEP Discussion Papers dp1109, Centre for Economic Performance, LSE.
    5. Nicholas Bloom & John Van Reenen, 2007. "Measuring and Explaining Management Practices Across Firms and Countries," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 122(4), pages 1351-1408.
    6. Mariagrazia Squicciarini & Marie Le Mouel, 2012. "Defining and Measuring Investment in Organisational Capital: Using US Microdata to Develop a Task-based Approach," OECD Science, Technology and Industry Working Papers 2012/5, OECD Publishing.
    7. Jovanovic, Boyan, 1979. "Job Matching and the Theory of Turnover," Journal of Political Economy, University of Chicago Press, vol. 87(5), pages 972-990, October.
    8. Andrew Atkeson & Patrick J. Kehoe, 2005. "Modeling and Measuring Organization Capital," Journal of Political Economy, University of Chicago Press, vol. 113(5), pages 1026-1053, October.
    9. Peter Moran, 2005. "Structural vs. relational embeddedness: social capital and managerial performance," Strategic Management Journal, Wiley Blackwell, vol. 26(12), pages 1129-1151, December.
    10. Nicholas Bloom & John Van Reenen, 2010. "Why Do Management Practices Differ across Firms and Countries?," Journal of Economic Perspectives, American Economic Association, vol. 24(1), pages 203-224, Winter.
    11. Che, Natasha Xingyuan, 2009. "Sectoral Structural Change in a Knowledge Economy," MPRA Paper 19839, University Library of Munich, Germany.
    12. Sherwin Rosen, 1972. "Learning by Experience as Joint Production," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 86(3), pages 366-382.
    13. Klaus E. Meyer & Ram Mudambi & Rajneesh Narula, 2011. "Multinational Enterprises and Local Contexts: The Opportunities and Challenges of Multiple Embeddedness," Journal of Management Studies, Wiley Blackwell, vol. 48(2), pages 235-252, March.
    14. Eve Caroli & John Van Reenen, 2001. "Skill-Biased Organizational Change? Evidence from A Panel of British and French Establishments," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 116(4), pages 1449-1492.
    15. Baruch Lev & Suresh Radhakrishnan, 2005. "The Valuation of Organization Capital," NBER Chapters, in: Measuring Capital in the New Economy, pages 73-110, National Bureau of Economic Research, Inc.
    16. Michele Pellizzari & Anne Fichen, 2013. "A New Measure of Skills Mismatch: Theory and Evidence from the Survey of Adult Skills (PIAAC)," OECD Social, Employment and Migration Working Papers 153, OECD Publishing.
    17. repec:dau:papers:123456789/10093 is not listed on IDEAS
    18. J. Behrman & T.N. Srinivasan (ed.), 1995. "Handbook of Development Economics," Handbook of Development Economics, Elsevier, edition 1, volume 3, number 3.
    19. Evenson, Robert E. & Westphal, Larry E., 1995. "Technological change and technology strategy," Handbook of Development Economics, in: Hollis Chenery & T.N. Srinivasan (ed.), Handbook of Development Economics, edition 1, volume 3, chapter 37, pages 2209-2299, Elsevier.
    20. Allen, J.P. & Levels, M. & van der Velden, R.K.W., 2013. "Skill mismatch and skill use in developed countries: Evidence from the PIAAC study," ROA Research Memorandum 017, Maastricht University, Research Centre for Education and the Labour Market (ROA).
    21. Allen, J.P. & Levels, M. & van der Velden, R.K.W., 2013. "Skill mismatch and use in developed countries: Evidence from the PIAAC study," Research Memorandum 061, Maastricht University, Graduate School of Business and Economics (GSBE).
    22. Mariagrazia Squicciarini & Luca Marcolin & Peter Horvát, 2015. "Estimating Cross-Country Investment in Training: An Experimental Methodology Using PIAAC Data," OECD Science, Technology and Industry Working Papers 2015/9, OECD Publishing.
    23. Georg von Krogh & Ikujiro Nonaka & Lise Rechsteiner, 2012. "Leadership in Organizational Knowledge Creation: A Review and Framework," Journal of Management Studies, Wiley Blackwell, vol. 49(1), pages 240-277, January.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Marie Le Mouel & Alexander Schiersch, 2020. "Knowledge-Based Capital and Productivity Divergence," Discussion Papers of DIW Berlin 1868, DIW Berlin, German Institute for Economic Research.
    2. Bruno Škrinjarić, 2022. "Competence-based approaches in organizational and individual context," Palgrave Communications, Palgrave Macmillan, vol. 9(1), pages 1-12, December.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Marie Le Mouel & Mariagrazia Squicciarini, 2015. "Cross-Country Estimates of Employment and Investment in Organisational Capital: A Task-Based Methodology Using Piaac Data," OECD Science, Technology and Industry Working Papers 2015/8, OECD Publishing.
    2. Pouliakas, Konstantinos & Russo, Giovanni, 2015. "Heterogeneity of Skill Needs and Job Complexity: Evidence from the OECD PIAAC Survey," IZA Discussion Papers 9392, Institute of Labor Economics (IZA).
    3. Bloom, Nicholas & Van Reenen, John, 2011. "Human Resource Management and Productivity," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 4, chapter 19, pages 1697-1767, Elsevier.
    4. Van Reenen, John, 2011. "Does competition raise productivity through improving management quality?," International Journal of Industrial Organization, Elsevier, vol. 29(3), pages 306-316, May.
    5. Hasan, Mostafa Monzur & Cheung, Adrian (Wai-Kong), 2018. "Organization capital and firm life cycle," Journal of Corporate Finance, Elsevier, vol. 48(C), pages 556-578.
    6. Andy Feng & Anna Valero, 2020. "Skill-Biased Management: Evidence from Manufacturing Firms," The Economic Journal, Royal Economic Society, vol. 130(628), pages 1057-1080.
    7. Li, Peixin & Li, Frank Weikai & Wang, Baolian & Zhang, Zilong, 2018. "Acquiring organizational capital," Finance Research Letters, Elsevier, vol. 25(C), pages 30-35.
    8. Russo, Giovanni, 2016. "Job Design and Skill Developments in the Workplace," IZA Discussion Papers 10207, Institute of Labor Economics (IZA).
    9. Wen Chen & Robert Inklaar, 2016. "Productivity spillovers of organization capital," Journal of Productivity Analysis, Springer, vol. 45(3), pages 229-245, June.
    10. Thomas Triebs & Subal C. Kumbhakar, 2012. "Management Practice in Production," ifo Working Paper Series 129, ifo Institute - Leibniz Institute for Economic Research at the University of Munich.
    11. Qiu, Buhui & Wang, Teng, 2018. "Does Knowledge Protection Benefit Shareholders? Evidence from Stock Market Reaction and Firm Investment in Knowledge Assets," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 53(3), pages 1341-1370, June.
    12. Anna Valero, 2021. "Education and management practices," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 37(2), pages 302-322.
    13. Hüseyin Taştan & Feride Gönel, 2020. "ICT labor, software usage, and productivity: firm-level evidence from Turkey," Journal of Productivity Analysis, Springer, vol. 53(2), pages 265-285, April.
    14. Sivropoulos-Valero, Anna Valero, 2021. "Education and management practices," LSE Research Online Documents on Economics 114436, London School of Economics and Political Science, LSE Library.
    15. Kenneth A. Younge & Matt Marx, 2016. "The Value of Employee Retention: Evidence From a Natural Experiment," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 25(3), pages 652-677, September.
    16. Ali, Abdilahi & Ali, Syed Imran, 2020. "Antecedents of the propensity to learn management practices and their impacts on firm outcomes in emerging markets: A Bayesian Model Averaging approach," International Business Review, Elsevier, vol. 29(4).
    17. Maloney, William F. & Sarrias, Mauricio, 2017. "Convergence to the managerial frontier," Journal of Economic Behavior & Organization, Elsevier, vol. 134(C), pages 284-306.
    18. Nicholas Bloom & Raffaella Sadun & John Van Reenen, 2010. "Recent Advances in the Empirics of Organizational Economics," Annual Review of Economics, Annual Reviews, vol. 2(1), pages 105-137, September.
    19. Phillipe Aghion & Nicholas Bloom & John Van Reenen, 2014. "Incomplete Contracts and the Internal Organization of Firms," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 30(suppl_1), pages 37-63.
    20. John T. Addison & Paulino Teixeira & Lutz Bellmann, 2023. "Performance and the Conjunction of Better Management Practices and Non-Union Workplace Representation," Journal of Labor Research, Springer, vol. 44(1), pages 1-43, June.

    More about this item

    Keywords

    Organisational capital; intangible capital; tasks; employment; investment; Programme for the International Assessment of Adult Competencies (PIAAC);
    All these keywords.

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity

    Statistics

    Access and download statistics

    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:diw:diwwpp:dp1522. 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.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with 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: Bibliothek (email available below). General contact details of provider: https://edirc.repec.org/data/diwbede.html .

    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.