Publication: Exports, Export Destinations, and Skills
Date
2010-05
ISSN
Published
2010-05
Author(s)
World Bank
Abstract
This paper explores the links between
exports, export destinations and skill utilization by firms.
The authors identify two mechanisms behind these links,
which we integrate into a unified theory of export
destinations and skills. First, exporting to high-income
countries requires quality upgrades that are skill-intensive
(Verhoogen, 2008). Second, exporting in general, and
exporting to high-income destinations in particular,
requires services like distribution, transportation, and
advertising, activities that are also intensive in skilled
labor (Matsuyama, 2007). Both theories suggest a skill-bias
in export destinations: firms that export to high-income
destinations hire more skills and pay higher wages than
firms that export to middle-income countries or that sells
domestically. The authors test the theory using a panel of
manufacturing Argentine firms. The data cover the period
1998-2000 and thus span the Brazilian currency devaluation
of 1999. The authors use the exogenous changes in exports
and export destinations brought about by this devaluation in
a major export partner to identify the causal effect of
exporting and of exporting to high-income countries on skill
utilization. The authors fine that Argentine firms exporting
to high-income countries hired a higher proportion of
skilled workers and paid higher average wages than other
exporters (to non high-income countries) and domestic firms.
Instead, the authors cannot identify any causal effect of
exporting per se on either skill utilization or average wages.
Citation
“World Bank. 2010. Exports, Export Destinations, and Skills. © http://openknowledge.worldbank.org/entities/publication/4b56732a-bb1e-5fbf-b793-0ff66b0ba546 License: CC BY 3.0 IGO.”