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Title:Trade openness and the demand for skills: evidence from Turkish microdata PDF Logo
Authors:Meschi, Elena
Taymaz, Erol
Vivarelli, Marco
Issue Date:2008
Series/Report no.:IZA discussion papers 3887
Abstract:In this paper we report evidence on the relationship between trade openness, technology adoption and relative demand for skilled labour in the Turkish manufacturing sector, using firm-level data over the period 1980-2001. In a dynamic panel data setting using a unique database of 17,462 firms, we estimate an augmented cost share equation whereby the wage bill share of skilled workers in a given firm is related to international exposure and technology adoption. Overall, results suggest that trade openness and technology play a key role in shifting the demand for labour towards more skilled workers within each firm. Technology-related variables (domestic R&D expenditures and technological transfer from abroad) are positive and significantly related to skill upgrading, as are the involvement of foreign capital in a firm's ownership and the propensity to export. Moreover, firms belonging to those sectors that most raised their imported inputs also experienced a higher increase in the labour cost share of skilled workers. This finding is consistent with the idea that imports by a middle-income country imply a transfer of new technologies that are more skill-intensive than those previously in use in domestic markets. This idea is reinforced by the finding that only imported inputs from industrialised countries - where the potential for innovation diffusion comes from - enter the estimated regression significantly.
Subjects:Globalisation
skills
skill-biased technological change
technology transfer
GMM-SYS
JEL:F16
O15
O33
Persistent Identifier of the first edition:urn:nbn:de:101:1-2008121997
Document Type:Working Paper
Appears in Collections:IZA Discussion Papers, Forschungsinstitut zur Zukunft der Arbeit (IZA)

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