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

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  • Jessica Bennett
  • Seamus McGuinness

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.

Suggested Citation

  • Jessica Bennett & Seamus McGuinness, 2009. "Assessing the impact of skill shortages on the productivity performance of high-tech firms in Northern Ireland," Applied Economics, Taylor & Francis Journals, vol. 41(6), pages 727-737.
    • Handle: RePEc:taf:applec:v:41:y:2009:i:6:p:727-737
    DOI: 10.1080/00036840601007450
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    References listed on IDEAS

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    1. Dickerson, Andy, 2003. "The Distribution and Determinants of Job Vacancies: Evidence From the 2001 Employers Skill Survey," Royal Economic Society Annual Conference 2003 63, Royal Economic Society.
    2. Nigel Pain, 1996. "Continental Drift: European Integration and the Location of UK Foreign Direct Investment," National Institute of Economic and Social Research (NIESR) Discussion Papers 107, National Institute of Economic and Social Research.
    3. Nickell, S. & Nicolitsas, D., 1997. "Human Capital, Investment and Innovation: What Are the Connections?," Papers 20, Centre for Economic Performance & Institute of Economics.
    4. John Forth, 2004. "The Impact of High-Level Skill Shortages on Firm-Level Performance: Evidence from the UK Technical Graduate Labour Market," National Institute of Economic and Social Research (NIESR) Discussion Papers 235, National Institute of Economic and Social Research.
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    Cited by:

    1. Kroczek, Martin & Koch, Andreas, 2024. "The reaction of wages to skill shortage in nursing," VfS Annual Conference 2024 (Berlin): Upcoming Labor Market Challenges 302406, Verein für Socialpolitik / German Economic Association.
    2. Peter Cappelli, 2014. "Skill Gaps, Skill Shortages and Skill Mismatches: Evidence for the US," NBER Working Papers 20382, National Bureau of Economic Research, Inc.
    3. Antoni, Manfred & Janser, Markus & Lehmer, Florian, 2015. "The hidden winners of renewable energy promotion: Insights into sector-specific wage differentials," Energy Policy, Elsevier, vol. 86(C), pages 595-613.
    4. Horbach, Jens & Rammer, Christian, 2020. "Labor shortage and innovation," ZEW Discussion Papers 20-009, ZEW - Leibniz Centre for European Economic Research.
    5. Martin Guzi & Martin Kahanec & Lucia Mýtna Kureková, 2018. "How Immigration Grease Is Affected by Economic, Institutional, and Policy Contexts: Evidence from EU Labor Markets," Kyklos, Wiley Blackwell, vol. 71(2), pages 213-243, May.
    6. Ulceluse, Magdalena, 2020. "Self-employment as a stepping stone to better labor market matching: a comparison between immigrants and natives," Journal of Demographic Economics, Cambridge University Press, vol. 86(4), pages 479-501, December.
    7. Hanan Morsy & Adamon N. Mukasa, 2019. "Working Paper 326 - Youth Jobs, Skill and Educational Mismatches in Africa," Working Paper Series 2452, African Development Bank.
    8. Akomah Benjamin Boahene & Ahinaquah Laud Kwamina & Mustapha Zakari, 2020. "Skilled Labour Shortage in the Building Construction Industry Within the Central Region," Baltic Journal of Real Estate Economics and Construction Management, Sciendo, vol. 8(1), pages 83-92, January.
    9. Nik Dawson & Marian-Andrei Rizoiu & Benjamin Johnston & Mary-Anne Williams, 2020. "Predicting Skill Shortages in Labor Markets: A Machine Learning Approach," Papers 2004.01311, arXiv.org, revised Aug 2020.
    10. Sharma, Kishor & Oczkowski, Edward & Hicks, John, 2016. "Skill shortages in regional Australia: A local perspective from the Riverina," Economic Analysis and Policy, Elsevier, vol. 52(C), pages 34-44.
    11. Seamus McGuinness & Konstantinos Pouliakas & Paul Redmond, 2018. "Skills Mismatch: Concepts, Measurement And Policy Approaches," Journal of Economic Surveys, Wiley Blackwell, vol. 32(4), pages 985-1015, September.
    12. Sandra M. Leitner, 2022. "A skill‐specific dynamic labour supply and labour demand framework: A scenario analysis for the Western Balkan countries to 2030," LABOUR, CEIS, vol. 36(4), pages 471-504, December.
    13. Mok, Penny & Mason, Geoff & Stevens, Philip & Timmins, Jason, 2012. "A Good Worker is Hard to Find: Skills Shortages in New Zealand Firms," Occasional Papers 12/5, Ministry of Economic Development, New Zealand.
    14. McGuinness, Seamus & Pouliakas, Konstantinos & Redmond, Paul, 2017. "How Useful Is the Concept of Skills Mismatch?," IZA Discussion Papers 10786, Institute of Labor Economics (IZA).
    15. David Morris & Enrico Vanino & Carlo Corradini, 2020. "Effect of regional skill gaps and skill shortages on firm productivity," Environment and Planning A, , vol. 52(5), pages 933-952, August.
    16. Pouliakas, Konstantinos & Wruuck, Patricia, 2022. "Corporate Training and Skill Gaps: Did COVID-19 Stem EU Convergence in Training Investments?," IZA Discussion Papers 15343, Institute of Labor Economics (IZA).
    17. Aleksandr Yu. Kokovikhin, 2020. "Skills management in regional economic policy of the OECD and the EU member countries," Upravlenets, Ural State University of Economics, vol. 11(5), pages 81-96, November.
    18. Morsy, Hanan & Mukasa, Adamon, 2019. "Youth Jobs, Skill and Educational Mismatches in Africa," MPRA Paper 100394, University Library of Munich, Germany.
    19. Anneleen Vandeplas & Anna Thum-Thysen, 2019. "Skills Mismatch and Productivity in the EU," European Economy - Discussion Papers 100, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
    20. Karolis Matikonis & Matthew Gobey, 2024. "Small Business Property Tax Reductions and Firm Productivity," Small Business Economics, Springer, vol. 62(1), pages 307-324, January.

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