Learning on the quick and cheap
Subtitle: gains from trade through imported expertise
By: James R. Markusen, Thomas F. Rutherford.
Contributors: Rutherford, Thomas Fox; National Bureau of Economic Research.
Series: NBER working paper series ;; working paper 10603; Working paper series (National Bureau of Economic Research : Online) ;; working paper no. 10603.
Publisher: National Bureau of Economic Research
Published: 2004
Place of publication: Cambridge, MA
Language: eng
Format: Electronic resource
Description: "Gains from productivity and knowledge transmission arising from the presence of foreign firms has received a good deal of empirical attention, but micro-foundations for this mechanism are weak .  Here we focus on production by foreign experts who may train domestic unskilled workers who work with them.  Gains from training can in turn be decomposed into two types: (a) obtaining knowledge and skills at a lower cost than if they are self-taught at home, (b) producing domestic skilled workers earlier in time than if they the domestic economy had to rediscover the relevant knowledge through reinventing the wheel'.  We develop a three-period model in which the economy initially has no skilled workers.  Workers can withdraw from the labor force for two periods of self study and then produce as skilled workers in the third period.  Alternatively, foreign experts can be hired in period 1 and domestic unskilled labor working with the experts become skilled in the second period.  We analyze how production, training, and welfare depend on two important parameters: the cost of foreign experts and the learning (or absorptive) capacity of the domestic economy"--National Bureau of Economic Research web site.
Notes: Also available in print.
Includes bibliographical references.
Title from PDF file as viewed on 1/11/2005.
System requirements: Adobe Acrobat Reader.
Mode of access: World Wide Web.