Abstract
Controlling firms’ sales in the labour demand model, this paper investigates effects of trade and R&D via technical progress on labour demand in a dynamic framework, based on a panel of Swedish manufacturing firms for 1990s. The main results of this study indicate that employment elasticities with respect to different characteristics of firms (wages, total sales, exports and R&D efforts) and industrial import penetration could vary across respective skilled sectors. There is some indication to that import penetration from fourteen ‘old members’ of European Union could induce capital-saving technical progress and result in the rise in demand for labour for firms in medium-low skilled sector, whilst those from the ten ‘new members’ of European Union could induce x-efficiency and labour-saving technical progress for firms in low-skilled sector. Furthermore, the effects of R&D intensity on demand for labour are positive and significant for firms in medium-high-skilled and high-skilled sectors.
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Notes
The ten countries that joined the EU with effect from May 2004.
R&D expenditure are only available for firms with at least 50 employees in the manufacturing sector, which is reported in Financial Statistics (FS) but with zero values for more than 50% of the observations. Similarly, information about export and domestic sale are only available for the firms with at least 50 employees.
See Lundin (2004)
See, e.g. Nickell and Wadhwani (1991) and Revenga (1997) for detail discussions on insider and outsider wages. Nickell and Wadhwani (1991) argue that it is positive as the industrial wages are associated with firm wages. Then, when it is negative, it is consistent with the assumption of efficient wage models.
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Acknowledgements
Author is grateful for Lars Lundberg, Eddy Szirmai, Fredrik Heyman, Lars Hultkrantz, Sune Karlsson, Katariina Hakkala and anonymous referees for their valuable suggestions and comments. Author acknowledges gratefully the research scholarships facilitated by the Swedish Foundation for International Cooperation in Research and Higher Education (STINT) and the Bank of Sweden Tercentenary Foundation (RJ) through their joint establishment of Swedish School of Advanced Asia Pacific Studies (SSAAPS).
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Appendices
Appendix A Trading partners
Appendix B Descriptions on variables
Appendix C Empirical statistics and regression results
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Yun, L. Technical Progress and Labour Demand in Swedish Manufacturing Firms. J Ind Compet Trade 8, 147–167 (2008). https://doi.org/10.1007/s10842-007-0009-7
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DOI: https://doi.org/10.1007/s10842-007-0009-7