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The Impact of Production Fragmentation on Skill Upgrading: New Evidence from Japanese Manufacturing

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  • Nobuaki Yamashita

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Abstract

This paper examines the hypothesis that industries engaged in international fragmentation of production experience greater skill upgrading using a panel dataset of Japanese manufacturing over the period 1980-2000. The novelty of the study comes from the use of a newly constructed index using trade data on parts and components to measure intraindustry variations in the degree of international vertical specialization (fragmentation intensity of trade). It also employs a methodology designed to embody peculiarities of Japan's fragmentation trade pattern. While the findings of existing studies are inconclusive, it is found that the expansion of fragmentation trade with developing East Asian countries has had a significant impact on the skills composition of Japanese manufacturing employment. At the same time, fragmentation trade with high income countries has had a skill downgrading effect.

Suggested Citation

  • Nobuaki Yamashita, 2008. "The Impact of Production Fragmentation on Skill Upgrading: New Evidence from Japanese Manufacturing," Departmental Working Papers 2008-06, The Australian National University, Arndt-Corden Department of Economics.
  • Handle: RePEc:pas:papers:2008-06
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    References listed on IDEAS

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    Cited by:

    1. repec:gam:jsusta:v:10:y:2018:i:4:p:1219-:d:141496 is not listed on IDEAS
    2. Kiyota, Kozo & Maruyama, Sawako, 2017. "ICT, offshoring, and the demand for part-time workers: The case of Japanese manufacturing," Journal of Asian Economics, Elsevier, vol. 48(C), pages 75-86.
    3. KWON Hyeog Ug, 2012. "Offshoring of Japanese Small and Medium Enterprises (Japanese)," Discussion Papers (Japanese) 12004, Research Institute of Economy, Trade and Industry (RIETI).
    4. Athukorala, Prema-chandra & Yamashita, Nobuaki, 2006. "Production fragmentation and trade integration: East Asia in a global context," The North American Journal of Economics and Finance, Elsevier, vol. 17(3), pages 233-256, December.
    5. Sara Amoroso & Pietro Moncada-Paternò-Castello, 2018. "Inward Greenfield FDI and Patterns of Job Polarization," Sustainability, MDPI, Open Access Journal, vol. 10(4), pages 1-20, April.
    6. Patarapong INTERAKUMNERD & Kriengkrai TECHAKANONT, 2015. "Intra-industry Trade, Product Fragment," Working Papers DP-2015-10, Economic Research Institute for ASEAN and East Asia (ERIA).
    7. Masahiro Endoh, 2016. "The Effect of Offshoring on Skill Premiums: Evidence from Japanese Matched Worker-Firm Data," Keio-IES Discussion Paper Series 2016-005, Institute for Economics Studies, Keio University.
    8. repec:era:wpaper:dp-2015-73 is not listed on IDEAS

    More about this item

    Keywords

    Production Fragmentation; Skill Upgrading; Japanese Manufacturing;

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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