Exports, Export Destinations, and Skills
This paper explores the links between exports, export destinations and skill utilization by firms. The authors identify two mechanisms behind these links, which we integrate into a unified theory of export destinations and skills. First, exporting...
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| Language: | English |
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2013
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| Online Access: | http://documents.worldbank.org/curated/en/2010/05/16400586/exports-export-destinations-skills-exports-export-destinations-skills http://hdl.handle.net/10986/13261 |
| Summary: | This paper explores the links between
exports, export destinations and skill utilization by firms.
The authors identify two mechanisms behind these links,
which we integrate into a unified theory of export
destinations and skills. First, exporting to high-income
countries requires quality upgrades that are skill-intensive
(Verhoogen, 2008). Second, exporting in general, and
exporting to high-income destinations in particular,
requires services like distribution, transportation, and
advertising, activities that are also intensive in skilled
labor (Matsuyama, 2007). Both theories suggest a skill-bias
in export destinations: firms that export to high-income
destinations hire more skills and pay higher wages than
firms that export to middle-income countries or that sells
domestically. The authors test the theory using a panel of
manufacturing Argentine firms. The data cover the period
1998-2000 and thus span the Brazilian currency devaluation
of 1999. The authors use the exogenous changes in exports
and export destinations brought about by this devaluation in
a major export partner to identify the causal effect of
exporting and of exporting to high-income countries on skill
utilization. The authors fine that Argentine firms exporting
to high-income countries hired a higher proportion of
skilled workers and paid higher average wages than other
exporters (to non high-income countries) and domestic firms.
Instead, the authors cannot identify any causal effect of
exporting per se on either skill utilization or average wages. |
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