The Impact of Production Fragmentation on Skill Upgrading: New Evidence from Japanese Manufacturing

Nobuaki Yamashita

Departmental Working Papers from The Australian National University, Arndt-Corden Department of Economics

Abstract: This paper examines the hypothesis that industries engaged in international fragmentation of production experience greater skill upgrading using a panel dataset of Japanese manufacturing over the period 1980-2000. The novelty of the study comes from the use of a newly constructed index using trade data on parts and components to measure intraindustry variations in the degree of international vertical specialization (fragmentation intensity of trade). It also employs a methodology designed to embody peculiarities of Japan's fragmentation trade pattern. While the findings of existing studies are inconclusive, it is found that the expansion of fragmentation trade with developing East Asian countries has had a significant impact on the skills composition of Japanese manufacturing employment. At the same time, fragmentation trade with high income countries has had a skill downgrading effect.

Keywords: Production Fragmentation; Skill Upgrading; Japanese Manufacturing (search for similar items in EconPapers)
JEL-codes: F14 F16 J31 (search for similar items in EconPapers)
Pages: 52 pages
Date: 2008
New Economics Papers: this item is included in nep-int and nep-lab
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Citations: View citations in EconPapers (11)

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Persistent link: https://EconPapers.repec.org/RePEc:pas:papers:2008-06

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