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International Economic Activities and Skilled Labour Demand : Evidence from Brazil and China

2009, Fajnzylber, Pablo, Fernandes, Ana M.

Using two new firm-level datasets, this article investigates the impact of three international economic activities--the use of imported inputs, exports, and foreign direct investment--on skilled labour demand in Brazil and China. We find that Brazilian firms that engage in these activities exhibit a higher skilled labour demand than firms that do not. In contrast, Chinese firms that engage in these activities have a lower skilled labour demand than firms that do not. Thus, international economic activities act as a channel for skill-biased technology diffusion in Brazil but have an effect of specialization according to comparative advantage in unskilled labour-intensive goods in China.