Human Capital Endowments Research Articles

Inter-group performance of oil producing countries: a meta and global frontier analysis

PurposeThe purpose of this study is to compare the production efficiencies and frontiers differences of oil-producing countries (OPCs) in four inter-governmental organizations (IGOs) in the international petroleum industry with the aim of providing such countries understanding of group characteristics that help maximize their supply interests.Design/methodology/approachThe empirical analysis is based on 14 years of panel data covering the period from 2000 to 2013. In all 46 unique countries who are members of four IGOs relevant to the international petroleum industry are examined on individual and group bases. The authors use both metafrontier analysis and global frontier difference in examining the group average and group frontiers, respectively.FindingsGroups with high inter and intra-group collaborations which ensure exchange of information, organizational learning and innovation tend to do better than groups with even higher hydro-carbon endowment. Additionally, hydro-carbon resource endowment may not be the solution to group inefficiency without higher endowment in human capital, economic stability, technology and infrastructure.Practical implicationsChoice of inter-governmental organizational membership should be based on the level of inter- and intra-group collaborations, human capital endowment among others and not mere historic links or even resource endowment.Originality/valueThis is among the few studies to compare and rank IGOs. Specifically, it is among the first studies to analyze the petroleum production efficiencies of IGOs involved in the international petroleum industry. This study assesses the performance differences among OPCs with the aim of identifying for OPCs the characteristics of inter-governmental groups that are beneficial to efficiency in upstream petroleum activities.

Citizenship for Sale and the Neoliberal Political Economy of Belonging

Recent research considers the proliferation of citizenship-by-investment schemes primarily as a manifestation of the commodification of citizenship and of states succumbing to the logic of the market. I argue that these schemes exceed mere processes of commodification. They are part of a neoliberal political economy of belonging which prompts states to include and exclude migrants according to their endowment of human, financial, economic, and emotional capital. Hence, I show how the growing mobility opportunities for wealthy and talented migrants, the opening of humanitarian corridors for particularly vulnerable refugees, and the hardening of borders for “ordinary” refugees and undocumented migrants are manifestations of the same neoliberal rationality of government. Conceptually, I challenge mainstream understandings of neoliberalism as a process of commodification characterized by the “retreat of the state” and “domination of the market.” I approach neoliberalism as a process of economization which disseminates the model of the market to all spheres of human activity, even where money is not at stake. Neoliberal economization turns states and individuals into entrepreneurial actors that attempt to maximize their value in economic and financial, as well as moral and emotional terms. This argument advances existing scholarship on the neoliberalization of citizenship by showing how this process encompasses the emergence of distinctively neoliberal forms of belonging.

The Role of Human Capital in Cluster‐Based Industrial Development

More often than not, manufacturing industries are clustered in small areas in developing economies of Asia and sub‐Saharan Africa (SSA). While agglomeration economies arising from low transaction costs are a clear advantage of industrial clusters, a drawback is the ease of imitation, which leads to the gap between social and private benefits of innovation. An important observation is that multifaceted innovation, consisting of the quality improvement of products, improved internal management, and the introduction of new marketing systems, takes place in many industrial clusters in Asia, but such innovation seldom occurs in SSA. This article attributes this to greater endowment of entrepreneurial human capital, and increased possibility of learning advanced technologies and management methods from neighboring countries in Asia than in SSA. This article also discusses evidence suggesting that multifaceted innovation can be stimulated by offering management training to entrepreneurs in SSA.

The contributions of human capital, R&D spending and convergence to total factor productivity growth

The study investigates the drivers of total factor productivity (TFP) growth, covering 99 European regions from 31 countries over the period 2000–13. It shows that human capital endowment had a positive effect upon TFP growth, particularly in advanced regions, but the effect from regions’ own research and development (R&D) expenditures was largely absent. The effects of human capital and R&D on TFP growth varied with the productivity gap. Further, there was a threshold effect in convergence, where stronger TFP growth was associated with both a larger productivity gap and a higher initial level of productivity. Spatial spillover effects had a positive impact upon TFP growth.

The impact of health on wages: evidence for Europe.

This paper analyses the effects of health on wages in sixteen European countries using production frontier methodology. It is assumed that workers have a potential income/productivity which basically depends on their human capital, but due to several health problems, situations could exist where workers fail to reach their potential income frontier. The estimation of a true-random-effects model allows us to conclude that the potential hourly wage of workers is significantly influenced by their level of education and their job experience. However, health problems, especially those strongly influencing work activities, contribute towards an individual not attaining the potential income which would otherwise be guaranteed by their human capital endowment. Suffering a strong limitation reduces gross wage per hour by 6.1%. This wage reduction is also observed in the case of a weak limitation, but here the wage difference with respect to workers without any limitation is 2.6%. Additionally, other factors, such as being a woman, the economic cycle or having a temporary contract, appear to distance an individual from their wage frontier.

Regional and individual determinants of entrepreneurial growth aspirations

This paper investigates the unique and joint effects of population density and early-stage entrepreneurs’ human capital endowments (higher education, entrepreneurship training and owner-manager experience) on entrepreneurial growth aspirations. We test a number of hypotheses using data that combine individual and province level information in Spain over the period 2008-2010. We argue that growth aspirations of early-stage entrepreneurs are higher in more densely populated regions, but that such environmental influence is stronger for individuals with greater human capital. This is because they will be more aware that denser regions offer more favorable conditions for new businesses and also requires greater firm growth to compensate for a higher risk of business failure. Consistent with our view, we find that the growth aspirations of entrepreneurs with higher education are higher in densely populated provinces.

The influence of the early formation of human and social capital on inventiveness: perspectives from a Swedish case study

Analysing life-history narratives of Swedish inventors, this paper explores how family background influences upon the formation of social and human capital and demonstrates how these capital resources affect the creative abilities of inventors. The main findings of the paper are that the socio-economic position one is born into has important implications for the development of human and social capital, and that the nature and extent of an inventor’s capital assets strongly influences the nature of his or her inventiveness. Inventors who come from higher socio-economic backgrounds have greater endowments of formal human capital than those from more modest backgrounds, and the social networks they use in their inventive work link them to other actors with human capital endowments similar to their own. Therefore, inventors with high human capital endowments will benefit from their social networks, as they constitute important means of gaining access to innovative knowledge and business advice. In contrast, inventors from lower socio-economic backgrounds with limited formal human capital resources are more likely to have actors in their social networks who themselves possess limited formal human capital. However, these inventors may become prosperous inventors if they are endowed with great social capital resources from their formative backgrounds because, for inventors, high endowments of social capital can compensate for a lack of formal human capital.

Spatial Dependence Structure of Total Factor Productivity in Polish Local Administrative Districts

The interaction between space (location) and the processes of accumulation (growth) is one of the most interesting and at the same time the most difficult areas of modern economic theory. The up till now empirical research on determinants of regional productivity in the case of Poland is however relatively scarce. Most studies focus on explaining the variation in regional income per capita mostly at NUTS–2 and NUTS–3 levels, and only a few take into account a highly spatially disaggregated NUTS–4 level. We aim to fill this important gap. The present article has several objectives. We try to explain the spatial patterns of productivity, to identify the spatial range of productivity spillovers empirically and to identify the determinants of the Total Factor Productivity (TFP) growth in Poland with the use of spatial econometric modeling and the extended version of the Nelson‑Phelps (1966) model. The study adopts an NUTS-4 level of local administrative districts (powiats) which we find superior on both theoretical (market closing) and empirical grounds (spatial modeling). TFP in Poland assumes the highest values in the metropolitan centers and spreads out on their nearest surroundings with the maximum value for Warsaw. The secondary local hills in TFP are located in cities or towns with county rights. TFP, in general, shows a downward trend as one moves from the west to the east with the lowest values observed in the south‑eastern part of Poland. The range of TFP spillover is found to be of roughly 175–200 km and is nonlinearly decreasing from the local productivity hills. Furthermore, the rate of growth of TFP shows spatial autocorrelation and is found to depend positively on the rate of increase in human capital endowment and on the gap from the leader under certain assumptions. We find no evidence of the channel through imports. However, the FDI channel is found to be robust and strong.

Exploring the Links Between Education and Income Inequality at the Municipal Level in Greece

This paper builds upon the EU2020 strategy, following the smart and inclusive growth paradigm, that treats human capital as a central component of regional development. However, there are cases of smart growth policies, focusing on skills’ empowerment, which may not yield the expected results, in terms of social cohesion aspects. Given this fact, the role of regional specificities, such as the extent to which an economy is characterized by a knowledge-based structure, constitute essential parameters that need to be taken into consideration during a policy-design process. This study aims to provide an evidence-based sub-regional analysis to assist processes regarding place-based policy design for socio-economic inclusion, in the case of Greece. More specifically, it investigates the links between education and income inequality, at a municipal level during the period 1994–2012, using a balanced panel dataset. The results indicate a negative effect of educational level on the formation of income inequality, probably due to the lack of an advanced knowledge-based economic structure in the case of the Greek economy. The significance of incorporating local particularities in the analysis, such as human capital endowments and time-varying socio-economic disturbances, as the 2008 economic crisis, is also stressed. Finally, the econometric method used in this paper includes the development of a DSEM model estimated by a system GMM estimator.

Comparing the gender gap in gross and base wages

PurposeThe purpose of this paper is to examine the gender wage gap not only in gross wages, but also focussing on a specific salary component, the base wage, which is determined by collective bargaining for each occupational category.Design/methodology/approachThe authors estimate a wage frontier to analyze the difference between workers’ observed wages and their potential wage, given human capital endowments, as well as firm characteristics. Next, the authors examine the distance to the frontier as a function of workers’ gender, in order to test whether women fail to achieve potential wages to any great extent. To do so, the authors use data from the 2010 Spanish Structure of Earnings Survey.FindingsWhile men nearly achieve their potential base wage, females are systematically and significantly below the wage frontier (93 per cent on average). In other words, even when the authors limit the analysis to the base wage, the authors still find a significant wage differential between men and women. A detailed analysis of this result points to the existence of occupational segregation in the labour market. Within each occupational category, females tend to be concentrated in the lower ranking jobs, which entail lower wages. This result is consistent with the existence of a sticky floors phenomenon.Originality/valueThe authors contribute to the literature on gender discrimination that focusses on specific wage components. As far as the authors know, to date this is the first analysis to focus on a component that responds more to the characteristics of the job rather than to those of the worker.

Czy mieszkając na wsi warto się kształcić? Kapitał ludzki jako determinanta dochodów na wsi i w mieście

The article aims to explore how human capital influences the amount of income of employees living in the countryside and in cities. Previous research into the impact of human capital on income in the countryside has mainly focused on the farming population, ignoring the non-agricultural population. These studies have used sex, region and place of origin as the variables that differentiate the strength of the relationship between human capital and income. Little interest has been devoted to differences between urban and rural areas. This article therefore tries to fill the existing research gap. The study is based on the data of the Social Diagnosis conducted between 2005 and 2015. The authors use log-linear regression to estimate the impact of selected human capital dimensions on incomes obtained. The results indicate that higher returns from human capital endowment are observed among employees living in rural areas although the differences between rural and urban residents have undergone a gradual decrease. The most important elements affecting their incomes are higher education and a driving license.

Does easy start-up formation hamper incumbents’ R&D investment?

This paper investigates the implications that complementary assets needed for the formation of start-ups have on the innovative efforts of incumbent firms. In particular, we highlight a strategic incentive effect by which the innovative efforts of incumbents are decreasing in the availability of the complementary assets needed for the creation of a start-up. Furthermore, we argue that the R&D investments of incumbents are positively related to the presence of policy support to innovation, and to the firm’s endowment of human capital. The empirical relevance of our theoretical hypotheses is investigated—and supported—by using firm level data.

The Drivers of Market Integration Among Indigenous Peoples: Evidence From the Ecuadorian Amazon

ABSTRACTKnowledge of the driving forces behind indigenous participation in the market is essential for practitioners intending to integrate conservation and development policies in indigenous territories. Nevertheless, empirical research on the determinants of market integration among indigenous peoples is still scarce. This article uses household survey data and multivariate techniques to examine the drivers of market integration among indigenous groups in the Ecuadorian Amazon. We use multiple measures of market integration, including the sale of crops, timber, and wildlife; the use of credit; and participation in wage labor. The results show that the way in which indigenous peoples integrate into the market depends on their endowments of human, financial, and physical capital. More educated households are able to engage in commercial agriculture and nonagricultural wage work, whereas uneducated poor households in communities in conflict with outsiders are pushed to engage in poorly paid agricultural wage work and (often illegal) timber operations.

Wage Discrimination Against Immigrants in Austria?

AbstractThis paper analyses wage discrimination against immigrants in Austria using combined information from the labour force surveys and administrative social security data. We find that immigrants experience a wage penalty of 15 percentage points compared with natives. However, a substantial part of this gap can be explained by differences in human capital endowment and job position. Decomposition methods using quantile regressions indicate larger discrimination in the upper part of the wage distribution.

Agricultural Productivity Growth and the Role of Capital in South Asia (1980–2013)

The study assessed agricultural sustainability in South Asia (i.e., Bangladesh, Pakistan, India and Nepal) by computing multi-lateral multi-temporal Total Factor Productivity (TFP) indices and their six finer components (technical change, technical-, scale- and mix-efficiency changes, residual scale and residual mix-efficiency changes) and examined the role of capital in driving TFP growth covering a 34-year period (1980–2013). Results revealed that all countries sustained agricultural productivity growth at variable rates with Bangladesh experiencing highest rate estimated @1.05% p.a. followed by India (0.52%), Pakistan (0.38%) and Nepal (0.06% p.a.). There were little or no variation in technical and scale efficiency changes among the countries. However, residual scale efficiency increased @0.44% p.a. in Bangladesh, 0.12% p.a. in Pakistan, remained unchanged in India and declined −0.39% p.a. in Nepal. Similarly, mix efficiency increased @0.44% in Bangladesh, remained unchanged in India and declined @−0.12% p.a.in Pakistan and −0.39% p.a. in Nepal. The major drivers of agricultural TFP growth were the levels of natural, human and technology capital endowments whereas financial capital and crop diversification had opposite effects. Policy implications include land and tenurial reforms aimed at consolidating farm operation size and smooth operation of the land rental market to improve natural capital, investments in education to improve human capital and agricultural R&D to enhance technology capital in order to boost agricultural productivity growth in South Asia.

Analysis of the Gender Impact on Entrepreneurship in Democratic Republic of the Congo (DRC)

Several studies in the literature show that female entrepreneurship is a factor of social well-being improvement. However, the number of women in business remains significantly lower in comparison with that of male entrepreneurs in developing countries. Some studies provide evidence of female underperformance in terms of efficiency and growth of firm, while others do not find gender-based differentials. Using data from the World Bank’s Enterprise Surveys of 2010 and 2013, this study aims to (i) highlight the impact of gender on the entrepreneurial performance and (ii) explore the factors of difference in entrepreneurship between men and women. Results from econometric and decomposition analyses suggest that, female managed and/or owned firms are less effective in terms of number of employees than their male counterparts. Nevertheless, female entrepreneurship affects positively the growth of annual sales. However, the gender based difference of firm performance is mainly due to the difference in human capital endowments between male and female entrepreneurs.

What drives employment growth and social inclusion in the regions of the European Union?

ABSTRACTWhat drives employment growth and social inclusion in the regions of the European Union? Regional Studies. The European Union promotes development strategies aimed at producing growth with ‘a strong emphasis on job creation and poverty reduction’. However, whether the economic conditions in place in European Union regions are ideal for the generation of high- and low-skilled employment and labour market inclusion is unclear. This paper assesses how the key factors behind European Union growth strategies – infrastructure, human capital, innovation, quality of government – condition employment generation and labour market exclusion in European regions. The findings indicate that the dynamics of employment and social exclusion vary depending on the conditions in place in a region. While higher innovation and education contribute to overall employment generation in some regional contexts, low-skilled employment grows the most in regions with a better quality of government. Regional public institutions, together with the endowment of human capital, emerge as the main factors for the reduction of labour market exclusion – particularly in the less developed regions – and the promotion of inclusive employment growth across Europe.

Enabling Factors in Firms Adoption of New Digital Technologies. An Empirical Inquiry on a Manufacturing Region

This paper provides an analysis on the diffusion of the last generation digital technologies (Industry 4.0) in the Veneto region, one of the main manufacturing territory in Italy. Our attention focuses on factors that enable firms to adopt these technologies, with attention to three main aspects: the human capital endowment, the international openness, and the financial structure. Empirical analysis is based on a sample of firms that operate in manufacturing, construction and business services. Our analysis shows a heterogeneous diffusion of Industry 4.0 technologies across different industries, allowing the identification of distinct technologies frontiers among sectors. The logit regression shows a positive relation between the adoption of digital technologies and the openness to international markets, as well as with a highly skilled and highly educated human capital. The digital users show better productivity indexes than other firms, but at the same time financial performances are less clear. Hence, the firms that adopt new digital technologies have a more balanced financial structure, but they do not show higher profitability ratios than non-users. This result depends on a longer run return on investment and in a different distributive policy inside the firm.

What types of intangible resources are important for emerging market firms when going international?

The paper explores the use of different types of intangible resources on each phase of the process of internationalization in the context of emerging economies. Assuming that companies follow a gradual process, an internationalization index considering export, import and investment activities is built. The index allows identification of six stages of international expansion, using a database of more than 2,000 Russian companies. The findings reveal that relational capital has a significant positive impact on each stage of internationalization, and that organizational capital improves internationalization except in the last, multinational stage. A higher endowment of human capital is positively associated with first three stages of internationalization.

Immigration, Unemployment and Wages: New Causality Evidence from the United Kingdom

The vast literature on the effects of immigration on wages and employment is plagued by likely endogeneity and aggregation biases. Ours is among the first papers to address both of these issues by means of causality analysis and by accounting for human capital endowments. Our analysis confirms the previous finding of limited effect of immigration on unemployment and wages in aggregate analysis. We do find, however, evidence of distributional effects when accounting for human capital of non-migrants.