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Technology, MNEs activity and Italian skill upgrading

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  • Mara GRASSENI

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Abstract

This paper analyses empirically whether skill-biased technological change and foreign direct investment play a role in explaining the skill-upgrading in Italian manufacturing industry during the 1990s. To test this issue I use, simultaneously, industry level data from two groups of firms: foreign owned firms and Italian multinational firms investing abroad. But while the results do not find evidence of skill upgrading transmitted through R&D effort undertaken by Italian parents, they support the hypothesis of a positive role played by the group of foreign owned firms. This result is confirmed especially in low-tech sectors. However, this positive impact may be partially or completely offset if the share of inward FDI activity increases over a certain threshold. The empirical evidence does not provide support that the R&D effort undertaken in high-tech sectors by each group of firms has influence on Italian skill upgrading

Suggested Citation

  • Mara GRASSENI, 2004. "Technology, MNEs activity and Italian skill upgrading," Departmental Working Papers 2004-25, Department of Economics, Management and Quantitative Methods at Università degli Studi di Milano.
  • Handle: RePEc:mil:wpdepa:2004-25
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    File URL: http://wp.demm.unimi.it/files/wp/2004/DEMM-2004_025wp.pdf
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    References listed on IDEAS

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    1. Feenstra, Robert C & Hanson, Gordon H, 1996. "Globalization, Outsourcing, and Wage Inequality," American Economic Review, American Economic Association, pages 240-245.
    2. Paolo Figini & Holger Görg, 1999. "Multinational companies and wage inequality in the host country: The case of Ireland," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), pages 594-612.
    3. Manasse, Paolo & Stanca, Luca & Turrini, Alessandro, 2004. "Wage premia and skill upgrading in Italy: why didn't the hound bark?," Labour Economics, Elsevier, vol. 11(1), pages 59-83, February.
    4. Feenstra, Robert C & Hanson, Gordon H, 1996. "Globalization, Outsourcing, and Wage Inequality," American Economic Review, American Economic Association, pages 240-245.
    5. Mariacristina Piva & Marco Vivarelli, 2005. "Innovation and Employment: Evidence from Italian Microdata," Journal of Economics, Springer, pages 65-83.
    6. Mariacristina Piva & Marco Vivarelli, 2005. "Innovation and Employment: Evidence from Italian Microdata," Journal of Economics, Springer, pages 65-83.
    7. Butler, Alison & Dueker, Michael, 1999. "Does foreign innovation affect domestic wage inequality?," Journal of International Economics, Elsevier, pages 61-89.
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    Cited by:

    1. Malick Souare & Boxi Zhou, 2016. "Foreign-affiliate presence and skilled labour demand," International Economics and Economic Policy, Springer, pages 233-254.

    More about this item

    Keywords

    Foreign Direct Investment; Skill Biased Technological Change; Skill Upgrading;

    JEL classification:

    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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