Human Capital Transfers Research Articles

FDI and import competition and domestic firm's capital structure: Evidence from Chinese firm-level data

This study explores how foreign competition impacts the capital structure of domestic firms. While existing literature reveals that import competition is associated with a decrease in domestic firms' leverage, we propose a novel perspective concerning the positive effect of inward foreign direct investment (FDI) on leverage. FDI competition can boost demand for debt via productivity spillover to domestic firms, and also increase supply of debt by inducing lenders to herd toward foreign investors. Using Chinese firm-level data, we find that the positive effects of industry inward FDI on domestic firms' leverage are more pronounced in high-tech industries, industries with higher productivity growth, and industries where foreign investors exhibit a higher degree of herding behavior. Our instrument variable approach, employing industry exchange rates and import tariffs, supports these findings. Additionally, we reveal that the positive effect of FDI on local firms' leverage is amplified when the firms have stronger absorptive capacities, receive foreign capital, and experience more human capital transfers from foreign rivals.

Immigration and labour market flows

We document facts about the labour–market transition rates of immigrants and natives in France, Spain and the US, for the period between 2003 and 2018. We find large differences in how immigrants’ labour–market transitions compare to those of natives across the three countries. Native-immigrant gaps in transition rates are not equal across nationalities of immigrants within each county, and cannot be explained by compositional differences in terms of observable characteristics such as education, age, sector or occupation. Our results point to other factors, such as human capital transferability, discrimination, type of migration and language proficiency as being more important determinants of immigrants’ labour market performance. Despite the differences across the three countries, using a VAR model we find a common stylized fact: inflows of foreign workers have a weak and mostly non-significant effect on the job-finding and job-separation rates of natives.

The Human Factor in Acquisitions: Cross-industry Labor Mobility and Corporate Diversification

Abstract The benefits of internal labor markets are largest when they include industries that utilize similar worker skills, thereby facilitating cross-industry worker reallocation and collaboration. We show that diversifying acquisitions occur more frequently among industry pairs with higher human capital transferability. Such acquisitions result in larger labor productivity gains and are less often undone in subsequent divestitures. Moreover, acquirers retain more high-skill workers and more often transfer workers to jobs in other industries inside the merged firm. Overall, our results link human capital reallocation with the value created by corporate diversification and provide an explanation for seemingly unrelated acquisitions. Authors have furnished an Internet Appendix, which is available on the Oxford University Press Web site next to the link to the final published paper online.

Does Certifying Foreign Qualifications Lead to Better Immigrant Skills Utilization?

Using a novel panel dataset on recent immigrants in Switzerland, we study the relationship between the degree of skills utilization, the foreign-acquired education and its certification in the host country. We find that the relationship with foreign education is negative, especially when acquired in a non-EU country, in line with the literature documenting the imperfect international transferability of human capital. Obtaining a “Certificate of Equivalence” in Switzerland makes this relationship statistically non-significant: in other words, the certification enables immigrants to enjoy the same degree of skills utilization in the Swiss labour market as those with Swiss education. Additional results suggest that immigrants with a foreign but not Swiss-certified education keep the degree of skill utilization as high as it would be if they were Swiss educated when they obtain a job contract or job offer before migrating to Switzerland. These findings are robust to controlling for self-selection on unobserved characteristics.

Education-Occupation Mismatch and Nativity Inequality Among Highly Educated U.S. Workers.

Extensive research has documented persistent nativity inequality in the U.S. labor market, even among high-skilled immigrants. Yet, this phenomenon has not been sufficiently explained. This study investigates whether different types of education-occupation mismatch are a source of this inequality. Using longitudinal data from the Survey of Income and Program Participation, we examine nativity differences in the incidence and wage penalty of education-occupation mismatch among highly educated workers. The results demonstrate that high-skilled immigrants, especially those with foreign degrees, are more vulnerable to vertical and horizontal mismatch and suffer higher wage penalties from mismatched employment than similarly educated native-born workers. Auxiliary analyses show that the disadvantage foreign-educated skilled immigrants experience is largely concentrated among immigrants from countries with lower quality tertiary education, immigrants with lower English proficiency, and those with degrees in non-STEM fields and fields with demanding licensing requirements. These results point to skilled immigrants' limited human capital transferability, which stems from the quality and applicability of educational credentials, language proficiency, and institutional barriers.

The Specificity and Transferability of Human Capital: Empirical Evidence of Task-Specificity and Resource Complementarity Using Sales Performance Data

The Specificity and Transferability of Human Capital: Empirical Evidence of Task-Specificity and Resource Complementarity Using Sales Performance Data

How general is managerial human capital?: Evidence from the Retention of Managers after M&As

Abstract This paper investigates the transferability of managerial human capital by examining how managers’ tenures in target firms influence their probability of retention as board members after mergers or acquisitions in Japanese firms. It develops a general equilibrium model that distinguishes several hypotheses on managerial human capital based on the coefficients of tenure on separation, given several data limitations. In particular, the paper provides a novel method to correct for selection biases by utilizing the timing of selection in a selected sample, which does not require a random sample from the population. Our results suggest that Japanese firms value both target firm-specific and general human capital after M&As and that experience as an employee increases firm-specific skills, but at the expense of the accumulation of general skills. However, managerial experience does not have this effect.

The human capital and income of immigrants: evidence from Russia

ABSTRACT This study examines how immigration flows caused by the disintegration of states and globalisation change the composition of the labour force and how human capital is transferred from countries of the former Soviet Union to Russia. We estimate the contribution of imperfect human capital transferability to explaining the immigrant–native income differentials by using the Russian Longitudinal Monitoring Survey of 2009–2012. The findings reveal that the income of foreign-born people who moved before the disintegration of the USSR is not significantly different from the income of native-born citizens. In contrast, foreign-born groups who immigrated to Russia after the disintegration of the USSR have lower incomes than the native-born group. In addition, the income premium on education and labour experience received in host countries of the foreign-born group is lower compared to the income premium on education and labour experience received in Russia. An important factor explaining the difference in income between natives and foreign-born people who moved to Russia after the collapse of the USSR is the imperfection in the mechanism of human capital transferability.

Book review. Migration and the Transfer of Informal Human Capital

Book review. Migration and the Transfer of Informal Human Capital

Sustainable Development Pathways for Chinese Cities: An Assessment of the Advanced Inclusive Wealth Index

AbstractThe inclusive wealth index (IWI) is a stock metric proposed internationally in recent years to measure a region's sustainable development potential. To explore sustainability more comprehensively in this context, this paper improves the inclusive wealth (IW) system proposed by the United Nations Environment Programme by extending the definition of intangible capital and refining the classification of different types of capital. We then used the advanced IWI to investigate the changes in per capita IW and its capital composition in China's 10 National Sustainable Development Agenda Innovation Demonstration Zones from 2010 to 2019, and proposed sustainable development pathways for Chinese cities. Our results underline the fact that IW and capital structure across different types of cities is highly variable. The growth of IW per capita in Shenzhen, an international metropolis, mainly depends on advanced produced capital and intangible capital. For Ordos, however—a resource‐rich “energy city”—the per capita IW is driven by ordinary produced capital and restricted by non‐renewable natural capital, thus showing a low level of sustainability. Through its consideration of four kinds of capital, this study also points out the inequality of human capital between urban‐rural and male‐female groups, and demonstrates how increasing educational attainment helps to promote the transfer of human capital between regions and sectors. In general, a strong potential for sustainable development is linked to the promotion of highly educated human capital, advanced produced capital and intangible capital, while the ecosystem service value of natural capital is also key.

Heterogeneity in the Causal Link between FDI, Globalization and Human Capital: New Empirical Evidence Using Threshold Regressions

Human capital formation in developing countries is a policy instrument to promote economic progress. In recent decades, FDI can act as a mechanism for transmitting human capital in the context of highly globalized countries. Extensive literature indicates that the formation of human capital is one of the most effective mechanisms for promoting structural change in countries. This research examines the causal link between FDI flows, globalization, and knowledge. This relationship is moderated by the index of electoral democracy, employment in agriculture, rent from natural resources, export diversification, and fertility. We employ a set of threshold regressions based on the idea that FDI levels will be significant and permanent as long as FDI transmits knowledge to recipient countries from a substantial level of FDI. The results show a threshold effect in the electoral democracy index and foreign direct investment at the global level and high- and upper-middle-income countries. In addition, we found a threshold effect for the electoral democracy index in the East Asia Pacific regions and the Middle East and North African countries. There is a threshold effect in East Asia, the Pacific, and Latin America in FDI. Based on the results, policymakers should promote FDI and electoral democracy flows above the threshold to encourage the transfer of human capital in the countries analyzed.

The returns to school-quality-adjusted education of immigrants in Germany

This paper explores the role of school quality in immigrants’ home countries on their earnings in Germany, using native Germans as a benchmark. We propose an empirical analysis that highlights two important insights. First, there is a substantial gap in the returns to education between natives and immigrants in Germany, especially when we consider the quality of schooling in the source country where education was obtained. In particular, lower school quality reduces the endowment advantage that immigrants possess from their education. Second, quality-adjusted education helps us to better understand the potential driving force behind the native–immigrant wage gap. We show that this measure accounts for a substantial fraction of the unexplained part in the Oaxaca–Blinder decomposition. These findings emphasize the role of the school quality in explaining the imperfect transferability of human capital of immigrants in Germany.

Human capital transfers and sub-national development: Armenian and Greek legacy in post-expulsion Turkey

Can the economic legacy of highly skilled groups persist long after they were uprooted from their homelands? To answer this question, we study long-term sub-national development in Turkey after the mass expulsions of the Armenian and Greek communities of the Ottoman Empire in the early 20th century. Since these events led to an almost complete and permanent removal of both communities from Turkey within a short time period, they provide a unique quasi-natural experiment that rules out any direct minority influence on development in the post-expulsion period. By exploiting local variations in historical minority population shares and community buildings across modern districts and villages/neighborhoods within each district, we document a sizable Armenian and Greek legacy effect on contemporary measures of economic development. We argue that this persistent influence is grounded on the significant contribution of Armenian and Greek communities to human capital accumulation among Muslims. We show evidence that inter-group transfers of skills and knowledge were instrumental in this process, leading to greater human capital among Muslims in minority regions both in the past and today.

Ethnic Wage Penalty and Human Capital Transferability: A Comparative Study of Recent Migrants in 11 European Countries

This article examines the ethnic wage penalty among migrants in 11 Western European countries. It aims to extend the literature on the models of migrant occupational inclusion in European labor markets by studying the wage gap and to disentangle whether the gross wage penalty experienced by foreign-born residents can be explained by human capital-related factors and/or by migrants’ occupational segregation. Estimating probit models with sample selection on European Labour Force Survey data (2009–2016), we find that both male and female migrants experienced a larger gross wage penalty in Southern Europe, where they had lower education levels and faced stronger occupational segregation. In the other countries under study, we find a smaller gross wage penalty among foreign-born women. Results show that migrants from Eastern Europe were not systematically less penalized than migrants from Africa, Asia, and Latin America, except for men in Italy and Greece. Wage penalties were higher among tertiary-educated migrants, compared to their less-educated counterparts, only in Mediterranean countries, where the former were mainly concentrated at the bottom of the occupational structure. Finally, the acquisition of the highest education after migration reduced migrants’ wage penalty, thanks to a better match between educational credentials and job allocation, especially in Southern Europe. Focusing on the ethnic wage penalty and on both human capital- and occupation-related factors of ethnic penalization highlights cross-country differences not yet explored by existing comparative research, allowing a new and more comprehensive picture of migrants’ penalization in Europe.

Multidimensional Impact Evaluation: The Impact of the Women’s Income Generating Support Program in Northern Uganda

Abstract This paper assesses the impact of a human capital and cash transfer intervention on individual disempowerment. Using a randomised controlled trial across 120 villages in Northern Uganda, we take a multidimensional measurement approach to evaluate the impact of Women’s Income Generating Support Program on the empowerment of ultra-poor and conflict-affected women. Building on the findings of Blattman et al. (2016) who find positive effects of the program on microenterprise ownership and income, we investigate the effects of the program on women who were most disempowered through an analysis of the joint distribution of the impacts and the changes in deprivation profiles of the targeted populations. Using a measure of ten indicators in five dimensions, we find that the intervention is successful in reducing the average number of deprivations by 13.6% on average relative to the control group at endline. Our analysis show that the intervention was successful in reducing the incidence and the severity of disempowerment among those who experience it more severely. However, we find that, even at endline, most of the participants in the sample experienced deprivation in at least two of the ten indicators simultaneously and that the group dynamics arm of the program did not have a significant impact on the beneficiaries’ empowerment.

Do Ex-Bankers Benefit Nonfinancial Firms? Evidence from Job Transitions

Abstract We document the beneficial impact of human capital transfer from banks to nonfinancial firms: firms hiring ex-bankers have higher asset and employment growth and easier access to bank loans. Using a unique employee-employer-matched data set from Russia and exogenous variation in ex-bankers’ supply due to bank-branch-network restructurings, we establish the causal interpretation of these patterns. We also show that ex-bankers’ human capital consists of bank-specific and banking industry expertise (with the latter being acquired through interbank connections). Firms recognize the value of ex-bankers, who receive significant salary bonuses when a new bank loan is issued to the firm (JEL G21, G32, J24). Received August 17, 2020; editorial decision January 5, 2022; by editor: Isil Erel. Authors have furnished an Internet Appendix, which is available on the Oxford University Press Web site next to the link to the final published paper online.

Globalization Processes and Migration Mechanisms

The aim of this article is to analyse and assess the impact of globalisation processes in the context of migration mechanisms. The analysis is based on statistical data from International Organization for Migration (IOM), United Nations Department of Economic and Social Affairs (UNDESA), United Nations High Commissioner for Refugees (UNHCR) and Eurostat. Essentially, globalization consists of ongoing processes involving the flow of goods, information, capital, human resources and the development of transport and communication on an international scale. With advancing globalization processes, procedures applicable to the movement of human capital are simplified, and, at the same time, international migration intensifies. With respect to migration mechanisms, international agreements play an important role, as they establish rules for the movement of migrants across the borders of the state parties to particular agreements. The continually unfolding globalization processes in the 21st century indicate an increasingly evident trend whereby people from poor countries migrate to more affluent countries. Due to the high correlation between migration and socio-economic development, the issue of human capital transfer has become a matter of interest for international economic institutions, particularly where developing countries are concerned. Consequently, greater attention is focused on migration processes and their impact on the social and economic circumstances in particular countries.

Gender Dissimilarities in Human Capital Transferability of Cuban Immigrants in the US: A Clustering Quantile Regression Coefficients Approach with Consideration of Implications for Sustainability

Female participation in the labor market has been increasing over time. Despite the fact that the level of education among women has also increased considerably, the wage gap has not narrowed to the same extent. This dichotomy presents an important challenge that the United Nations Sustainable Development Goals with respect to gender inequities must address. Hispanics constitute the largest minority group in the US, totaling 60.6 million people (18.5% of the total US population in 2020). Cubans make up the third largest group of Hispanic immigrants in the US, representing 5% of workers. This paper analyzes the conditional income distribution of Cuban immigrants in the US using the clustering of effects curves (CEC) technique in a quantile regression coefficients modeling (QRCM) framework to compare the transferability of human capital between women and men. The method uses a flexible quantile regression approach and hierarchical clustering to model the effect of covariates (such as years of education, English proficiency, US citizenship status, and age at time of migration) on hourly earnings. The main conclusion drawn from the QRCM estimations was that being a woman had the strongest negative impact on earnings and was associated with lower wages in all quantiles of the distribution. CEC analysis suggested that educational attainment was included in different clusters for the two groups, which may have indicated that education did not play the same role for men and women in income distribution.

Transfer of Students’ Human Capital in the Russian Education System

The article is dedicated to the sociological interpretation of such a phenomenon as human capital transfer in educational communities. The first part reveals the content of the concept of «transfer of students’ human capital», while justifying its application in the study of the educational failure/success of schoolchildren and students. The second part presents a theoretical model of the considered phenomenon through such structural elements as goals, subjects, processes and mechanisms. The third part is devoted to the contradictions in the transfer of human capital within educational communities in Russia. The contradictions between goals and interests of the subjects of education are regarded as the key ones. The final part expands on how significant the concept under consideration is to sociology of education. The results of an interdisciplinary study conducted in 2019–2021 in Sverdlovsk region’s educational facilities (schools, colleges, universities) serve as the empirical foundation for the article. It is shown that transfer of students’ human capital is a kind of capital movement, with its features determined by the social nature of educational activities and interaction. The process under study is associated with such a phenomenon as academic success/failure of students, given that while it unfolds the human capital of schoolchildren and students can either be developed or depleted. The transfer of human capital involves three groups of education subjects — actors, agents and participants who perform certain social roles and possess varying opportunities for regulating this process. The empirical data is interpreted based on the proposed theoretical model, with the results indicating the contradictions of the goals, vectors and results of the transfer of human capital among Russian students.

Human capital transfer of German‐speaking migrants in eastern Europe, 1780s–1820s

AbstractPrior to the ‘Age of Mass Migration’, Germans left central Europe to settle primarily in modern‐day Hungary, Serbia, Romania, Ukraine, and Russia. Despite the harsh conditions that the first generation of settlers had to endure, their descendants often fared better, rather than worse, compared to native population groups. This study offers a possible explanation for this surprising outcome. It makes use of data on approximately 11 500 individuals to estimate and compare the basic numeracy scores of German settlers and other population groups in target regions. The findings show that German settlers generally had superior basic numeracy levels, which suggests that these settlers must have contributed positively to the human capital endowment in their target regions. The numeracy of Germans was somewhat higher than the numeracy of Hungarians and substantially higher than that of Russians, Ukrainians, and Serbs. No noteworthy differences are found in terms of numeracy between German emigrants and the population they left behind, which suggests the absence of substantial migrant selection.