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High Tech Firms in Israeli Industry

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  • Arie Bregman
  • Melvyn Fuss
  • Haim Regev

Abstract

The main purpose of this study is to characterize and analyze high technology industrial firms in Israel. We are able to advance beyond previous empirical studies of high technology because we have access to a unique individual firm data set, a sample of 670 establishments in Israel for the year 1982. Not only do we have basic production data at the individual firm level, but also each firm's capital stock revalued to 1982 dollars. A technology index is constructed from three technological indicators -- substantial R&D investment, a high proportion of the work force consisting of engineers and technicians, and a high proportion of the capital stock being of recent vintages. This technology index is used to classify firms. The largest concentration of High Tech firms are found in electronics and transport equipment industries, and the lowest in textiles and clothing. High Tech firms appear to be more productive, pay higher wages, and earn higher rates of return. Part of the higher wages to workers in High Tech firms accrue in the form of rents whereby workers in these firms exappropriate a portion of monopoly profits, a phenomenon which does not appear to be the case for Low Tech firms.

Suggested Citation

  • Arie Bregman & Melvyn Fuss & Haim Regev, 1989. "High Tech Firms in Israeli Industry," NBER Working Papers 2969, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:2969
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    References listed on IDEAS

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    1. Pack, Howard, 1988. "Industrialization and trade," Handbook of Development Economics, in: Hollis Chenery & T.N. Srinivasan (ed.), Handbook of Development Economics, edition 1, volume 1, chapter 9, pages 333-380, Elsevier.
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    1. Weisberg, Jacob, 1995. "Returns to education in Israel: 1974 and 1983," Economics of Education Review, Elsevier, vol. 14(2), pages 145-154, June.
    2. Neuman, Shoshana & Weiss, Avi, 1995. "On the effects of schooling vintage on experience-earnings profiles: Theory and evidence," European Economic Review, Elsevier, vol. 39(5), pages 943-955, May.

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