Technology Import and Industrial Employment: Evidence from Developing Countries

Arup Mitra

LABOUR, 2009, vol. 23, issue 4, 697-718

Abstract: Abstract. This paper based on panel data across countries examines the possible effect of the imported technology on labour absorption in the industrial sector, after controlling for real wage rate and GDP per capita. Findings tend to suggest a negative relationship between the two. Technical efficiency index derived on the basis of the stochastic frontier function framework is also negatively affected by the import of technology. Without enhancing the knowledge relating to the mechanisms of exploiting the new technology acquired from abroad, a mere increase in import of technology would mean rising unutilized capacity. And this could be due to the poor skill base of the available human capital. Investment in human capital in terms of skill formation, up‐gradation, and training on the one hand and technological advancement to suit the internal labour market conditions are the two important policy conclusions for reviving the role of industry as the engine of pro‐poor growth.

Date: 2009
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