IDEAS home Printed from https://ideas.repec.org/p/iza/izadps/dp7820.html
   My bibliography  Save this paper

The Impact of Globalization and Technology Transfer on Manufacturing Employment and Skills in Ethiopia

Author

Listed:
  • Haile, Getinet Astatike

    (University of Nottingham)

  • Srour, Ilina

    (Università Cattolica del Sacro Cuore)

  • Vivarelli, Marco

    (Università Cattolica del Sacro Cuore)

Abstract

There is a dearth of research on the impact of technological change on employment in the context of least developed countries (LDCs) embarking on globalization, which enhances the prospect of direct technological imports or embodied technological transfer. Using a sample of 1,940 enterprises from Ethiopia over the period 1996-2004 and deploying System Generalized Method of Moments (GMM-SYS), this paper attempts to establish the nature of manufacturing employment in Ethiopia and the role played by trade and FDI in determining employment. The empirical results obtained lend support to globalization having a labour-augmenting effect, increasing total manufacturing employment. The two-equation dynamic framework implemented to analyse enterprise-level employment trends by skill level provides some evidence of skill-bias specific to enterprises with higher share of foreign ownership and those that that are located in the vicinity of the capital city. Exporters are not found to benefit from "learning by exporting".

Suggested Citation

  • Haile, Getinet Astatike & Srour, Ilina & Vivarelli, Marco, 2013. "The Impact of Globalization and Technology Transfer on Manufacturing Employment and Skills in Ethiopia," IZA Discussion Papers 7820, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp7820
    as

    Download full text from publisher

    File URL: https://docs.iza.org/dp7820.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Lachenmaier, Stefan & Rottmann, Horst, 2011. "Effects of innovation on employment: A dynamic panel analysis," International Journal of Industrial Organization, Elsevier, vol. 29(2), pages 210-220, March.
    2. Aguirregabiria, Victor & Alonso-Borrego, Cesar, 2001. "Occupational structure, technological innovation, and reorganization of production," Labour Economics, Elsevier, vol. 8(1), pages 43-73, January.
    3. Coe, David T. & Helpman, Elhanan, 1995. "International R&D spillovers," European Economic Review, Elsevier, vol. 39(5), pages 859-887, May.
    4. Donald Robbins, 2003. "The impact of trade liberalization upon inequality in developing countries - A review of theory and evidence-," Documentos de Economía 3601, Universidad Javeriana - Bogotá.
    5. Rita K. Almeida, 2010. "Openness and Technological Innovation in East Asia: Have They Increased the Demand for Skills?," Asia-Pacific Development Journal, United Nations Economic and Social Commission for Asia and the Pacific (ESCAP), vol. 17(1), pages 63-95, June.
    6. Katz, Lawrence F. & Autor, David H., 1999. "Changes in the wage structure and earnings inequality," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 26, pages 1463-1555, Elsevier.
    7. Piva, Mariacristina & Santarelli, Enrico & Vivarelli, Marco, 2005. "The skill bias effect of technological and organisational change: Evidence and policy implications," Research Policy, Elsevier, vol. 34(2), pages 141-157, March.
    8. Andrea CONTE & Marco VIVARELLI, 2011. "Imported Skill‐Biased Technological Change In Developing Countries," The Developing Economies, Institute of Developing Economies, vol. 49(1), pages 36-65, March.
    9. Arne Bigsten & Paul Collier & Stefan Dercon & Marcel Fafchamps & Bernard Gauthier & Jan Willem Gunning & Abena Oduro & Remco Oostendorp & Catherine Pattillo & Måns Soderbom & Francis Teal & Albert Zeu, 2004. "Do African Manufacturing Firms Learn from Exporting?," Journal of Development Studies, Taylor & Francis Journals, vol. 40(3), pages 115-141.
    10. Giovanni Dosi & Richard Nelson, 2013. "The Evolution of Technologies: An Assessment of the State-of-the-Art," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 3(1), pages 3-46, June.
    11. Wolfgang Keller, 2004. "International Technology Diffusion," Journal of Economic Literature, American Economic Association, vol. 42(3), pages 752-782, September.
    12. repec:dau:papers:123456789/10093 is not listed on IDEAS
    13. Feenstra, Robert C. & Hanson, Gordon H., 1997. "Foreign direct investment and relative wages: Evidence from Mexico's maquiladoras," Journal of International Economics, Elsevier, vol. 42(3-4), pages 371-393, May.
    14. Stephen Bond & Anke Hoeffler, 2001. "GMM Estimation of Empirical Growth Models," Economics Series Working Papers 2001-W21, University of Oxford, Department of Economics.
    15. Welch, F, 1970. "Education in Production," Journal of Political Economy, University of Chicago Press, vol. 78(1), pages 35-59, Jan.-Feb..
    16. Vivarelli, Marco & Bogliacino, Francesco & Araújo, Bruno César, 2011. "Technology, trade and skills in Brazil: evidence from micro data," Revista CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), December.
    17. Robbins, Donald J., 1996. "Hos Hits Facts: Facts Win Evidence On Trade And Wages In The Developing World," Harvard Institute for International Development (HIID) Papers 294374, Harvard University, Kennedy School of Government.
    18. repec:bla:rdevec:v:3:y:1999:i:2:p:140-54 is not listed on IDEAS
    19. Eric A. Verhoogen, 2008. "Trade, Quality Upgrading, and Wage Inequality in the Mexican Manufacturing Sector," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 123(2), pages 489-530.
    20. Eli Berman & John Bound & Zvi Griliches, 1994. "Changes in the Demand for Skilled Labor within U. S. Manufacturing: Evidence from the Annual Survey of Manufactures," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 109(2), pages 367-397.
    21. Meschi, Elena & Taymaz, Erol & Vivarelli, Marco, 2011. "Trade, technology and skills: Evidence from Turkish microdata," Labour Economics, Elsevier, vol. 18(S1), pages 60-70.
    22. Eve Caroli & John Van Reenen, 2001. "Skill-Biased Organizational Change? Evidence from A Panel of British and French Establishments," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 116(4), pages 1449-1492.
    23. Piva, Mariacristina., 2004. "The impact of technology transfer on employment and income distribution in developing countries : a survey of theoretical models and empirical studies," ILO Working Papers 993666903402676, International Labour Organization.
    24. Daron Acemoglu, 2003. "Patterns of Skill Premia," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 70(2), pages 199-230.
    25. Stephen Machin & John Van Reenen, 1998. "Technology and Changes in Skill Structure: Evidence from Seven OECD Countries," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 113(4), pages 1215-1244.
    26. Hall, P.H. & Heffernan, S.A., 1985. "More on the employment effects of innovation," Journal of Development Economics, Elsevier, vol. 17(1), pages 151-162.
    27. Jörg MAYER, 2000. "Globalization, Technology Tranfer And Skill Accumulation In Low-Income Countries," UNCTAD Discussion Papers 150, United Nations Conference on Trade and Development.
    28. Hall, P. H. & Heffernan, S. A., 1985. "More on the employment effects of innovation," Journal of Development Economics, Elsevier, vol. 17(1-2), pages 151-162.
    29. Shiferaw, Admasu, 2007. "Firm Heterogeneity and Market Selection in Sub-Saharan Africa: Does It Spur Industrial Progress?," Economic Development and Cultural Change, University of Chicago Press, vol. 55(2), pages 393-423, January.
    30. Donald J. Robbins, 1996. "Evidence on Trade and Wages in the Developing World," OECD Development Centre Working Papers 119, OECD Publishing.
    31. Anderson, T. W. & Hsiao, Cheng, 1982. "Formulation and estimation of dynamic models using panel data," Journal of Econometrics, Elsevier, vol. 18(1), pages 47-82, January.
    32. Arne Bigsten & Mulu Gebreeyesus, 2007. "The Small, the Young, and the Productive: Determinants of Manufacturing Firm Growth in Ethiopia," Economic Development and Cultural Change, University of Chicago Press, vol. 55(4), pages 813-840, July.
    33. Stephen Bond & Anke Hoeffler & Jonathan Temple, 2001. "GMM Estimation of Empirical Growth Models," Economics Papers 2001-W21, Economics Group, Nuffield College, University of Oxford.
    34. Van Reenen, John, 1997. "Employment and Technological Innovation: Evidence from U.K. Manufacturing Firms," Journal of Labor Economics, University of Chicago Press, vol. 15(2), pages 255-284, April.
    35. Yeaple, Stephen Ross, 2005. "A simple model of firm heterogeneity, international trade, and wages," Journal of International Economics, Elsevier, vol. 65(1), pages 1-20, January.
    36. Robbins, Donald J., 2003. "The impact of trade liberalization upon inequality in developing countries : a review of theory and evidence," ILO Working Papers 993650553402676, International Labour Organization.
    37. Marco Vivarelli, 2013. "Technology, Employment and Skills: An Interpretative Framework," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 3(1), pages 66-89, June.
    38. Blundell, Richard & Bond, Stephen, 1998. "Initial conditions and moment restrictions in dynamic panel data models," Journal of Econometrics, Elsevier, vol. 87(1), pages 115-143, August.
    39. O. Ashenfelter & D. Card (ed.), 1999. "Handbook of Labor Economics," Handbook of Labor Economics, Elsevier, edition 1, volume 3, number 3.
    40. Griliches, Zvi, 1969. "Capital-Skill Complementarity," The Review of Economics and Statistics, MIT Press, vol. 51(4), pages 465-468, November.
    41. Navaretti, Giorgio Barba & Soloaga, Isidro & Takacs, Wendy, 1998. "When vintage technology makes sense : matching imports to skills," Policy Research Working Paper Series 1923, The World Bank.
    42. Eli Berman & John Bound & Zvi Griliches, 1993. "Changes in the Demand for Skilled Labor within U.S. Manufacturing Industries: Evidence from the Annual Survey of Manufacturing," NBER Working Papers 4255, National Bureau of Economic Research, Inc.
    43. Eddy LEE & Marco VIVARELLI, 2006. "The social impact of globalization in the developing countries," International Labour Review, International Labour Organization, vol. 145(3), pages 167-184, September.
    44. Shiferaw, Admasu, 2007. "Firm Heterogeneity and Market Selection in Sub-Saharan Africa: Does It Spur Industrial Progress?," Economic Development and Cultural Change, University of Chicago Press, vol. 55(2), pages 393-423, January.
    45. Marc J. Melitz, 2003. "The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry Productivity," Econometrica, Econometric Society, vol. 71(6), pages 1695-1725, November.
    46. Bruno Cesar Araújo & Francesco Bogliacino & Marco Vivarelli, 2011. "Technology, trade and skills in Brazil: Some evidence from microdata," DISCE - Quaderni del Dipartimento di Scienze Economiche e Sociali dises1171, Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE).
    47. Arne Bigsten & Mulu Gebreeyesus & Måns Söderbom, 2009. "Gradual Trade Liberalization and Firm Performance in Ethiopia," CSAE Working Paper Series 2009-21, Centre for the Study of African Economies, University of Oxford.
    48. Pablo Fajnzylber & Ana Fernandes, 2009. "International economic activities and skilled labour demand: evidence from Brazil and China," Applied Economics, Taylor & Francis Journals, vol. 41(5), pages 563-577.
    49. David H. Autor & Lawrence F. Katz & Alan B. Krueger, 1998. "Computing Inequality: Have Computers Changed the Labor Market?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 113(4), pages 1169-1213.
    50. Meschi, Elena & Vivarelli, Marco, 2009. "Trade and Income Inequality in Developing Countries," World Development, Elsevier, vol. 37(2), pages 287-302, February.
    51. Manuel Arellano & Stephen Bond, 1991. "Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 58(2), pages 277-297.
    52. Marco Vivarelli, 1995. "The Economics of Technology and Employment," Books, Edward Elgar Publishing, number 458.
    53. repec:ilo:ilowps:365055 is not listed on IDEAS
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Jamil Salmi & Andrée Sursock & Anna Olefir, 2017. "Improving the Performance of Ethiopian Universities in Science and Technology," World Bank Publications - Reports 28489, The World Bank Group.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Getinet Haile & Ilina Srour & Marco Vivarelli, 2014. "Globalization and Technology Transfer in Ethiopia: Their Impact on Domestic Employment and Skills," DISCE - Quaderni del Dipartimento di Scienze Economiche e Sociali dises1498, Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE).
    2. Haile, Getinet & Srour, Ilina & Vivarelli, Marco, 2017. "Globalization, Technological Change and Skills: Evidence from Ethiopia," GLO Discussion Paper Series 16, Global Labor Organization (GLO).
    3. Getinet Haile & Ilina Srour & Marco Vivarelli, 2017. "Imported technology and manufacturing employment in Ethiopia," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 7(1), pages 1-23, April.
    4. Vivarelli, Marco, 2014. "Structural Change and Innovation as Exit Strategies from the Middle Income Trap," IZA Discussion Papers 8148, Institute of Labor Economics (IZA).
    5. Ilina Srour & Erol Taymaz & Marco Vivarelli, 2014. "Globalization, Technology and Skills: Evidence from Turkish Longitudinal Microdata," ERC Working Papers 1405, ERC - Economic Research Center, Middle East Technical University, revised Jun 2014.
    6. Elena Meschi & Erol Taymaz & Marco Vivarelli, 2016. "Globalization, technological change and labor demand: a firm-level analysis for Turkey," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 152(4), pages 655-680, November.
    7. Marco Vivarelli, 2015. "Structural Change and Innovation in Developing Economies: A Way Out of the Middle Income Trap ?," LEM Papers Series 2015/09, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
    8. Marco Vivarelli, 2014. "The Middle Income Trap: A Way Out Based on Technological and Structural Change," DISCE - Quaderni del Dipartimento di Scienze Economiche e Sociali dises1403, Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE).
    9. Vivarelli, Marco, 2018. "Globalisation, structural change and innovation in emerging economies: The impact on employment and skills," MERIT Working Papers 2018-037, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    10. Ilina Srour & Marco Vivarelli & Erol Taymaz, 2013. "Technological Change and Skill-based Employment Disparities: Evidence from Turkey," DISCE - Quaderni del Dipartimento di Scienze Economiche e Sociali dises1393, Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE).
    11. Vivarelli, Marco, 2012. "Innovation, Employment and Skills in Advanced and Developing Countries: A Survey of the Literature," IZA Discussion Papers 6291, Institute of Labor Economics (IZA).
    12. Srour, Ilina & Taymaz, Erol & Vivarelli, Marco, 2013. "Skill-Biased Technological Change and Skill-Enhancing Trade in Turkey: Evidence from Longitudinal Microdata," IZA Discussion Papers 7320, Institute of Labor Economics (IZA).
    13. Meschi, Elena & Taymaz, Erol & Vivarelli, Marco, 2011. "Trade, technology and skills: Evidence from Turkish microdata," Labour Economics, Elsevier, vol. 18(S1), pages 60-70.
    14. Marco Vivarelli, 2013. "Technology, Employment and Skills: An Interpretative Framework," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 3(1), pages 66-89, June.
    15. Lanouar Charfeddine & Zouhair Mrabet, 2015. "Trade liberalization and relative employment: further evidence from Tunisia," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 5(1), pages 173-202, June.
    16. repec:ipg:wpaper:2014-504 is not listed on IDEAS
    17. Vivarelli, Marco & Bogliacino, Francesco & Araújo, Bruno César, 2011. "Technology, trade and skills in Brazil: evidence from micro data," Revista CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), December.
    18. Meschi, Elena & Vivarelli, Marco, 2009. "Trade and Income Inequality in Developing Countries," World Development, Elsevier, vol. 37(2), pages 287-302, February.
    19. Zuniga, Pluvia & Crespi, Gustavo, 2013. "Innovation strategies and employment in Latin American firms," Structural Change and Economic Dynamics, Elsevier, vol. 24(C), pages 1-17.
    20. Ugur, Mehmet & Mitra, Arup, 2017. "Technology Adoption and Employment in Less Developed Countries: A Mixed-Method Systematic Review," World Development, Elsevier, vol. 96(C), pages 1-18.
    21. Araújo, Bruno Cesar & Bogliacino, Francesco & Vivarelli, Marco, 2009. "The Role of "Skill Enhancing Trade" in Brazil: Some Evidence from Microdata," IZA Discussion Papers 4213, Institute of Labor Economics (IZA).

    More about this item

    Keywords

    skills; globalization; FDI; trade; technological change; employment; Ethiopia;
    All these keywords.

    JEL classification:

    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General
    • O55 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Africa
    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:iza:izadps:dp7820. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Holger Hinte (email available below). General contact details of provider: https://edirc.repec.org/data/izaaade.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.