nep-hrm New Economics Papers
on Human Capital and Human Resource Management
Issue of 2009‒12‒19
thirteen papers chosen by
Fabio Sabatini
University of Siena

  1. Brain Drain, Brain Gain, and Economic Growth in China By Ha, Wei; Yi, Junjian; Zhang, Junsen
  2. Entrepreneurial Human Capital, Complementary Assets, and Takeover Probability By Thorsten V. Braun; Sebastian Krispin; Erik E. Lehmann
  3. Institutions and the Allocation of Entrepreneurial Talent between Productive and Destructive Activities By Mark Sanders; Utz Weitzel
  4. Panel data estimates of the growth and level effects of human capital in the selected Asian countries By Rao, B. Bhaskara; Singh, Rup
  5. Skills and Industrial Competitiveness By Robert Stehrer; Terry Ward; Sebastian Leitner; Michael Landesmann
  6. HUMAN CAPITAL AND GROWTH: NEW EVIDENCES FROM AFRICAN DATA By Dorothée Boccanfuso; Luc Savard; Bernice E. Savy
  7. A Human Development Index by Internal Migrational Status By Harttgen, Kenneth; Klasen, Stephan
  8. Noncognitive skills in economics: models, measurement, and empirical evidence By Thiel, Hendrik; Thomsen, Stephan L.
  9. The impact of human and social capital on entrepreneurs’ knowledge of finance alternatives By A. SEGHERS; S. MANIGART; T. VANACKER
  10. South-South Migration and Human Development: Reflections on African Experiences By Bakewell, Oliver
  11. Immigration and Human Development: Evidence from Lebanon By Tabar, Paul
  12. The Global Economic Crisis Hampers Human Development. How? By Degol Hailu
  13. Skill composition and regional entrepreneurship: a comparative study between Germany and Portugal By Mendonça, Joana; Grimpe, Christoph

  1. By: Ha, Wei; Yi, Junjian; Zhang, Junsen
    Abstract: This paper examines the effects of both permanent and temporary emigration on human capital formation and economic growth of the source regions. To achieve this end, this paper explores the Chinese provincial panel data from 1980 to 2005. First, the fixed effects model is employed to estimate the effect of emigration on school enrollment rates in the source regions. Relative to this aspect, we find that the magnitude (scale) of permanent emigrants (measured by the permanent emigration ratio) is conducive to the improvement of both middle and high schools enrollments. In contrast, the magnitude of temporary emigrants has a significantly positive effect on middle school enrollment but does not have a significant effect on high school enrollment. More interestingly, different educational attainments of temporary emigrants have different effects on school enrollment. Specifically, the share of temporary emigrants with high school education positively affects middle school enrollment, while the share of temporary emigrants with middle school education negatively affects high school enrollment. Second, the instrumental variable method is applied to estimate the effect of emigration on economic growth within the framework of system Generalized Method of Moments (GMM). The estimation results suggest that both permanent and temporary emigrations have a detrimental effect on the economic growth of the source regions. Our empirical tests provide some new evidence to the "brain drain" debate, which has recently received increasing attention.
    Keywords: Brain drain; human capital; emigration; economic growth
    JEL: O15 J22 J24 O12
    Date: 2009–08–01
  2. By: Thorsten V. Braun (University of Augsburg, Department of Economics); Sebastian Krispin (University of Augsburg, Department of Economics); Erik E. Lehmann (University of Augsburg, Department of Economics)
    Abstract: Gaining access to technologies, competencies, and knowledge is observed as one of the major motives for corporate mergers and acquisitions. In this paper we show that a knowledge-based firm’s probability of being a takeover target is influenced by whether relevant specific human capital aimed for in acquisitions is directly accumulated within a specific firm or is bound to its founder or manager owner. We analyze the incentive effects of different arrangements of ownership in a firm’s assets in the spirit of the Grossman-Hart-Moore incomplete contracts theory of the firm. This approach highlights the organizational significance of ownership of complementary assets. In a small theoretical model we assume that the entrepreneur’s specific human capital, as measured by the patents they own, and the physical assets of their firm are productive only when used together. Our results show that it is not worthwhile for an acquirer to purchase the alienable assets of this firm due to weakened incentives for the initial owner. Regression analysis using a hand collected dataset of all German IPOs in the period from 1997 to 2006 subsequently provides empirical support for this prediction. This paper adds to previous research in that it puts empirical evidence to the Grossman-Hart-Moore framework of incomplete contracts or property rights respectively. Secondly, we show that relevant specific human capital that is accumulated by a firm’s founder or manager owner significantly decreases that firm’s probability of being a takeover target.
    Keywords: ownership structure, property rights, mergers & acquisitions
    JEL: G32 D23 G34
    Date: 2009–12
  3. By: Mark Sanders; Utz Weitzel
    Abstract: Entrepreneurship is generally regarded as a force of change, innovation and development in modern economies. Entrepreneurs bring new and better products to markets, restore allocative efficiency through arbitrage and reinvest their profits. However, as Baumol (1990), Mehlum et al. (2003) and Acemoglu (1995) have argued, the same energy and talent can also be allocated to unproductive ends and reduce total welfare. In this paper we present a model that analyzes the allocation of a given entrepreneurial talent over destructive and productive activities. We show that in this model two stable equilibria can emerge. As Baumol (1990) hypothesized, institutions determine the pay-offs to both types of entrepreneurial activity and hence drive this allocation. But we also show that the distribution of initial wealth and entrepreneurial talent plays a decisive role. This analysis provides a different perspective on the importance of high quality institutions in developing countries and sheds light on the situation in conflict and post-conflict countries, where both informal and formal institutions arguably have broken down. Under such circumstances, our analysis shows that micro credits can support the transition to a productive equilibrium, because they help to overcome credit contraints without creating incentives for destructive entrepreneurship.
    Keywords: growth, development, entrepreneurship, innovation, occupational choice
    JEL: O1 L26 P00
    Date: 2009–12
  4. By: Rao, B. Bhaskara; Singh, Rup
    Abstract: This paper uses an extension to the Solow growth model to estimate the level and growth effects of human capital. Empirical results for a panel of 10 Asian countries from 1960-2003 show that both the growth and level effects of human capital are positive and significant.
    Keywords: Level and growth effects of human capital; extension to the Solow growth model.
    JEL: O47
    Date: 2009–12–09
  5. By: Robert Stehrer (The Vienna Institute for International Economic Studies, wiiw); Terry Ward; Sebastian Leitner (The Vienna Institute for International Economic Studies, wiiw); Michael Landesmann (The Vienna Institute for International Economic Studies, wiiw)
    Abstract: This study has been prepared for the European Commission (Framework Contract B2/Entr/05/091) and is composed of five sections. The first three sections all deal with assessing the role of skills in the European economy: Section 1 undertakes a number of econometric exercises to analyse the relationship between skills and two indicators of competitiveness, productivity growth and exports. This and the next section represent new research effort in that a disaggregated database (by NACE 2-digit industries) has been used to analyse this relationship. Section 2 extends the analysis towards the relationship between skills and economic growth by analysing the role of skills in the context of a growth accounting exercise where skill changes are separately identified in affecting the 'quality of labour services' and hence the contribution of labour input to value added. Again the analysis exploits the detailed, disaggregated database made recently available through the EU KLEMS project. Section 3 presents an overview of skill compositional changes in different groups of EU economies. We distinguish between EU Northern economies, EU South (composed of Greece, Portugal and Spain) and the New Member States (restricted to only four countries, the Czech Republic, Hungary, Slovakia and Slovenia, for data reasons). In this section aggregate, economy-wide skill upgrading is decomposed into 'within' and 'between' (industry) changes in skill composition and the results show interesting patterns distinguished for more advanced and catching-up types of economies. The last two sections move away from the topic of reviewing the impact of skills on economic performance and the tracking of changing skill demands in EU economies. In section 4, a literature overview is provided of empirical studies regarding returns to skill acquisition through schooling and training. The idea behind this section is that returns to schooling and training reflect both skill shortages and also provide the basis for decisions with regard to skill acquisition. Finally, section 5 presents a country-by-country overview of how information is gathered with regard to skill gaps in different EU economies. The methodologies and sources for assessing skill shortages are reviewed. These are a necessary ingredient into any attempt of designing policies in relation to skill planning and the design of schooling and training institutions. The section closes with a recommendation on useful extension of European-wide vacancy statistics.
    Keywords: skills, competitiveness, European industry, Industry, International Trade and Competitiveness, Labour and Migration
    JEL: D24 F14 J24 O47 O52
    Date: 2009–08
  6. By: Dorothée Boccanfuso (GREDI, Faculte d'administration, Université de Sherbrooke); Luc Savard (GREDI, Faculte d'administration, Université de Sherbrooke); Bernice E. Savy (GREDI, Faculte d'administration, Université de Sherbrooke)
    Abstract: Economic theory long acknowledged a positive relation between human capital and economic growth (Smith, 1776; Becker, 1964), which was nevertheless called into question in the late 1990s (Caselli et al. 1996; Pritchett, 2001). The two primary criticisms evoked were the failure to consider diminishing returns to education and qualitative aspects of the stock of human capital. This work aims to redress inadequacies in the literature related to the usual proxy of human capital by advancing a composite indicator of human capital (PCA). This indicator allows for an integration of the qualitative aspects in question and uses the indicator of the stock of human capital (Mincer, 1974) to take diminishing returns into consideration. Adopting the methodology developed by Islam (1995) allows for the impact of human capital to become positive once again in the process of economic growth. The data also reveal a conditional convergence process for the 22 African countries considered over the period 1970 to 2000.
    Keywords: Economic growth, human capital, convergence, Africa
    JEL: O18 O47 O55
    Date: 2009–12–11
  7. By: Harttgen, Kenneth; Klasen, Stephan
    Abstract: Migration continues to be a very important income diversification strategy, especially for poor populations in developing countries. However, while there has been much analysis on the economic consequences of migration for migrants and the receiving regions, whether internal migration improves or deteriorates human development is not easy to determine. This papers applies a recently development analytical framework that allows to calculate the HDI for subgroups of a population. We use this approach to calculate the HDI by internal migrational status to assess the differences between the levels of human development of internal migrants compared to non-migrants, and also across countries as well as by urban and rural areas. An empirical illustration for a sample of 16 low and middle income countries shows that, overall, internal migrants slightly achieve a higher level of human development than non-migrants. The results also show that differences in income between migrants and non-migrants are generally higher than differences in education and life-expectancy. Disaggregating the analysis by urban and rural areas reveals that urban internal migrants are better o® than urban non-migrants and rural migrants are better off than rural non-migrants.
    Keywords: Human Development; Migration Income Inequality; Differential Mortality; Inequality in Education
    JEL: D31 I0 O15 J0
    Date: 2009–10–01
  8. By: Thiel, Hendrik; Thomsen, Stephan L.
    Abstract: There is an increasing economic literature considering personality. This paper provides an overview on the role of these skills regarding three main aspects of economic analysis: measurement, theoretical modeling, and empirical estimates. Based on the relevant literature from different disciplines, the common psychometric measures used to assess personality are discussed. A recently proposed theoretical framework of human capital production takes personality explicitly into account. It is reviewed to clarify the understanding of crucial features of skill development. Based on these foundations, the main results of the empirical literature regarding noncognitive skills are classified along the research questions and summarized. --
    Keywords: noncognitive skills,personality,human capital formation,psychometric measures
    JEL: I20 I28 J12 J24 J31
    Date: 2009
    Abstract: This paper examines how entrepreneurs’ human and social capital influence their knowledge of finance alternatives. For this purpose, we use survey data from 125 Belgian start-ups. Results demonstrate that entrepreneurs with a business education and entrepreneurs with experience in accountancy or finance have a broader knowledge of finance alternatives. Having a strong network in the financial community further enhances the knowledge of finance alternatives. However, more generic human capital has almost no impact on the knowledge of finance alternatives. Overall, this study demonstrates how not only supply-side factors, but also demand-side factors may constrain entrepreneurs in their search for finance.
    Date: 2009–10
  10. By: Bakewell, Oliver
    Abstract: This paper looks at the relationship between migration between developing countries – or countries of the global ‘South’ – and processes of human development. The paper offers a critical analysis of the concept of South-South migration and draws attention to four fundamental problems. The paper then gives a broad overview of the changing patterns of migration in developing regions, with a particular focus on mobility within the African continent. It outlines some of the economic, social and political drivers of migration within poor regions, noting that these are also drivers of migration in the rest of the world. It also highlights the role of the state in influencing people’s movements and the outcomes of migration. The paper highlights the distinctive contribution that migration within developing regions makes to human development in terms of income, human capital and broader processes of social and political change. The paper concludes that the analysis of migration in poorer regions of the world and its relationship with human development requires much more data than is currently available.
    Keywords: Migration; South-South migration; Africa; Human development
    JEL: J6 Z1 O15
    Date: 2009–04–01
  11. By: Tabar, Paul
    Abstract: This paper takes Lebanon as a case study to examine the relationship between human development and immigration. It examines this issue from both ends: the sending and the receiving countries. The author suggests that by developing the concept of a diasporic civil society and a diasporic public sphere, a significant aspect of the relationship between human development and immigration is illuminated especially at the level of political, social and cultural capitals. The paper also argues that the double impact of the home country and that of destination has a lot to say about the influence of immigration on human development in Lebanon. In examining Australia as a destination country, the paper shows the particular impact that globalisation and September 11 have lately had on the capacity of the Lebanese migrants for human development. Finally, the paper concludes by showing the extent to which the diasporic civil society compensates for the ‘negligent’ character of the Lebanese state in the context of human development.
    Keywords: Lebanese diaspora; human development; diasporic civil society; diasporic public sphere; economic and social capitals
    JEL: O15
    Date: 2009–08–01
  12. By: Degol Hailu (UNDP SURF)
    Abstract: For developing economies the current crisis means reduced demand for their exports, a decline in capital inflows and lower income from tourism. This One Pager discusses the transmission of the crisis from changes in aggregate variables to its impact on progress towards human development. The focus is on African economies.
    Keywords: The Global Economic Crisis Hampers Human Development. How?
    Date: 2009–09
  13. By: Mendonça, Joana; Grimpe, Christoph
    Abstract: The question whether agglomeration externalities arise either from specialization or diversification of economic activity has since long been a major topic in the analysis of factors determining economic growth. In this paper we analyze whether a more specialized or a more diverse skill composition of labor in regions affects the level of new firm entries in general as well as in technology- and knowledge-intensive subsectors. We compare Germany and Portugal which exhibit, though EU member states, different institutional infrastructures for entrepreneurship. Based on a harmonized dataset, our results indicate that the skill composition has different effects on firm entry in the two countries. More specifically, for Portugal the specialization of skills has a positive effect on the level on new firm entry in all sectors. In contrast to this, our results for Germany reveal exactly the opposite effect. These results suggest that both specialization and diversity theories hold, and that the effect thus may depend on other more local and regional factors. --
    Keywords: Entrepreneurship,skill composition,regional analysis,comparative study
    JEL: J24 L26 O57 R11
    Date: 2009

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