Assessing the impact of skill shortages on the productivity performance of high-tech firms in Northern Ireland

Jessica Bennett and Seamus McGuinness

Applied Economics, 2009, vol. 41, issue 6, 727-737

Abstract: This article utilizes data from three separate skill related surveys of firms in the Northern Ireland IT, Electronic Engineering and Mechanical Engineering industries in order to assess the extent to which the performance of high-tech firms are being constrained as a result of hard-to-fill and/or unfilled vacancies. Whist it was found that the determinants of skill shortage varied somewhat depending upon the definitional approach adopted, a high degree of correlation was found. With regards to the impacts of skill shortages on firm level performance, it was found that both hard-to-fill and unfilled vacancies had reduced output per worker levels by between 65 and 75% in affected firms, however, these impacts were only detecw after controlling for selection effects. The evidence suggests that standard OLS procedures can generate highly misleading results in studies of this nature.

Date: 2009
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DOI: 10.1080/00036840601007450

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