Technology Import and Industrial Employment: India and Other Developing Countries

  • Arup Mitra


The employment share of the industry has been decelerating in many developing countries. Even when industrialization in terms of value added has occurred in some of the countries, the share of industry in total workforce still dwindles at a low level. All this has raised concern as the twin objectives of growth and poverty reduction through productive employment generation in the industrial sector do not seem to have come through. This paper based on panel data from developing countries tries to verify if import of technology reduces the labour-absorbing capacity of the manufacturing sector. The overall results based on countries across South and East Asia, Africa and Latin America are indicative of such a tendency. After controlling for real wage rate and real GDP per capita, this chapter notes a negative effect of manufactures imports (as a percentage of total merchandise imports) on employment to value-added ratio. Besides, the technical efficiency index derived by employing a statistical stochastic frontier function framework also tends to vary inversely with technology import from abroad. This implies possible mismatches between the available technology and the skill base of the workforce to operate the technology. In fact, evidence is also indicative of an inverse relationship between inadequacy of skill and employment growth in the industrial sector. In particular, it examines if skill scarcity in the domestic economy reduces the optimum use of the technology imported from abroad.


Manufacturing Sector Employment Growth Capital Good Labour Productivity Growth Domestic Capital 


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Copyright information

© Springer India 2013

Authors and Affiliations

  • Arup Mitra
    • 1
  1. 1.Institute of Economic GrowthDelhi UniversityDelhiIndia

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