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Global Engagement and the Occupational Structure of Firms

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  • Heyman, Fredrik

    () (Research Institute of Industrial Economics (IFN))

  • Sjöholm, Fredrik

    () (Lund University)

  • Davidson, Carl

    () (Michigan State University)

  • Matusz, Steven

    () (Michigan State University)

  • Chun Zhu, Susan

    () (Michigan State University)

Abstract

Global engagement can impact firm organization and the occupations firms need. We use a simple task-based model of the firm’s choice of occupational inputs to examine how that choice varies with global engagement. We reveal a robust and causal relationship between global engagement and the skill mix of occupations within firms, using Swedish matched employer-employee data that link firms and the labor force for 1997-2005. Taking an instrumental variable approach, we find that increased export shares (driven by higher world import demand) skew the labor mix more toward high-skill occupations. Our results suggest that global engagement may require firms to employ more skilled labor to undertake complex tasks embodied in international businesses, which have further implications for the demand for specific occupational skills and overall wage dispersion.

Suggested Citation

  • Heyman, Fredrik & Sjöholm, Fredrik & Davidson, Carl & Matusz, Steven & Chun Zhu, Susan, 2014. "Global Engagement and the Occupational Structure of Firms," Working Paper Series 1026, Research Institute of Industrial Economics, revised 29 Aug 2017.
  • Handle: RePEc:hhs:iuiwop:1026
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    References listed on IDEAS

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    Cited by:

    1. Priit Vahter & Jaan Masso, 2018. "The Contribution Of Multinationals To Wage Inequality: Foreign Ownership And The Gender Pay Gap," University of Tartu - Faculty of Economics and Business Administration Working Paper Series 106, Faculty of Economics and Business Administration, University of Tartu (Estonia).

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    Keywords

    Occupational structure; Globalization; Multinational Enterprises; Exporters;

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • F20 - International Economics - - International Factor Movements and International Business - - - General

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