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Sectoral Technical Progress and Aggregate Skill Formation

Saibal Kar () and Chaitali Sinha ()

Journal of Industry, Competition and Trade, 2014, vol. 14, issue 2, 159-172

Abstract: Recent studies discuss micro-transmission mechanisms to measure spillover effects of MNC (Multinational Corporations) activity on human capital in host countries. We develop an aggregate transmission mechanism to show that technology deepening in advanced sectors affect economy-wide skill formation, not analyzed in previous studies. Sector-specific advanced technological input and borrowing from local capital market at preferential rates dampens rate of skill formation if local firms are more skill-intensive. Liberal trade policies applied only to MNC sector may lower traditional export if credit subsidy offered to MNCs is simultaneously withdrawn. Copyright Springer Science+Business Media New York 2014

Keywords: Skill; MNCs; Technology; Trade policy; Developing countries; F11; F23; J24 (search for similar items in EconPapers)
Date: 2014
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DOI: 10.1007/s10842-013-0152-2

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