The Impact of Human Capital Endowments on International Competitiveness, with Special Reference to Transition Economies

The aim of this thesis is to investigate the impact of human capital endowments on international competitiveness, with special reference to transition economies. This investigation is based on country, industry and firm level estimations using longitudinal and cross section data for the period 1995-2010 and 2011-2014, respectively. The theoretical framework informing this empirical investigation proposes a relationship between human capital and international competitiveness through the underlying mechanism of labour productivity and innovation. More educated and higher skilled individuals are more likely to innovate and/or adopt and use efficiently new sophisticated technologies which, consequently, boosts labour productivity. In turn, more productive firms and countries are more likely to maintain and/or develop their international competitiveness. In this investigation, the degree of international competitiveness is measured by export market share, relative export advantage, the share of medium and high tech exports, export sophistication, and export intensity. Human capital is represented by educational attainment, the quality of education, and provision/participation in training programmes. To empirically test the human capital-international competitiveness nexus, a diversified modelling strategy has been employed. In line with theoretical underpinnings, human capital endowments appear to exert a positive and significant impact on export market share at both country and industry levels, though this effect is not replicated when the relative export advantage index is taken as the measure of international competitiveness. The share of the population with tertiary education seems to exert a positive impact on the share of medium and high-tech manufactures exported by the EU-27, the impact being relatively stronger in the high tech category. No supporting evidence is found for the influence of the quality of education, irrespective of the international competiveness measure used. In the export sophistication sub-analysis, the estimated results suggest that the share of population with tertiary education has a positive impact only on the level of export sophistication of the EU-17. Consistent with previous research, the firm level results suggest that having a more educated workforce exerts a positive and statistically significant impact on the export intensity and export market share of firms in 30 transition economies. Mixed evidence is found for the role of on-the-job training programmes and years of experience of the top manager. The empirical evidence obtained in this investigation has potentially useful policy implications for European and Euro-Asian countries seeking to sustain or increase their international competitiveness

Human capital and international competitiveness in Europe, with special reference to transition economies

This paper assesses the impact of human capital endowments on international competitiveness in Europe, with special reference to transition economies in Central and Eastern Europe (CEE). The analysis uses longitudinal data for 27 European economies over the period 1995-2010. In line with the orthodox theory, a positive relationship is found between the labor force’s level of educational attainment and competitiveness. While in the European Economic Area (EEA17) tertiary education is the only significant education-based determinant of the export market share, in CEECs both the shares of the workforce with secondary and tertiary education are significant with the former having a greater impact. Some evidence is found for the hypothesized impact of the quality of education

Workforce Diversity and Innovation Performance: A Micro-Level Analysis of Transition Economies

The aim of this paper is to examine the relationship between the gender diversity of the workforce and innovation, using micro level data from 27 transition economies. The gender composition of the workforce is captured by the percentage of women employees, the Blau index of heterogeneity and Shannon entropy index. In exploring the effect of gender diversity, this study differentiates between product and process innovation. In addition to the main variables of interest, the empirical analysis is complemented by a set of control variables, industry and country dummies. To address potential endogeneity in the estimations, an instrumental variable approach is employed. The results of this study show that the presence of women in the workforce exerts a positive and statistically significant impact on both, product and process innovation. A positive association is also found between the gender diversity indices and the probability of introducing a new product and a new process, respectively. These finding are consistent with the view that having a more gender diverse workforce is associated with a variety of perspectives, skills and knowledge on performing creative tasks, new problem-solving techniques, which ultimately contribute to firm innovation

Gender and Firm Innovation: Evidence From Transition Economies

Innovation represents a key predictor of firm performance, international competitiveness and overall economic growth. While the determinants of innovation have been extensively investigated in the literature, research on the relationship between gender and innovation remains scarce, especially in the context of transition economies. Employing data from the most recent enterprise surveys (2018-2020), conducted by the EBRD, EIB and the World Bank, this study aims to assess the relationship between the participation of women in ownership structures, and top management and firm innovation, while controlling for many other firm characteristics. The results of this investigation suggest a positive association between the presence of at least one woman among owners and both, product and process innovation, the effect being less significant for the latter. The empirical findings also support the hypothesis that having a woman top manager increases a firm’s probability of carrying out product innovation. The effect is statistically insignificant in the case of process innovation

Gender-based differences in access to finance: A firm- level analysis

Gender-based discrimination in access to finance has become an issue of particular importance for scholars, and a major concern for policymakers. In many countries, women entrepreneurs face impediments and discrimination arising from various cultural and socio-economic factors. The aim of this paper is to assess the role of gender in securing external finance, controlling for an array of firm-specific characteristics, along with industry and country variables. The empirical analysis is conducted using firm-level survey data from the transition region of Central and Eastern Europe and Central Asia. To explore if women-led firms are more credit constrained than those led by men, several measures of access to finance are employed. To assess the robustness of the estimates, a diversified modelling strategy is adopted. Results from the regression analysis suggest that having a woman top manager decreases the probability of getting a line of credit or loan from a financial institution. The empirical findings also reveal that firms managed by women are less likely to apply for external finance than those managed by men

The evolution of the human capital stock in transition economies: an overview

The aim of this paper is to provide a discussion of the human capital development in the transition economies of Europe and Central Asia. It elaborates the evolution of the human capital stock since the beginning of the transformation process by focusing on the level of education attainment, quality of education and training incidence. Furthermore, it describes the key characteristics of the educational system of the region before and during the reform process with particular emphasis on different types of schooling, i.e. vocational versus general, non-cognitive skills development and the main pedagogical approach adopted. The remaining gaps with respect to the EU-18, skill and qualification mismatches and other transition-related subjects are also examined in this paper. The data review shows that the process of transition was associated with decreases in the proportion of population 15 and over with no completed schooling as well as those with primary education as their highest level attained. A positive trend was witnessed, on the other hand, in the proportion of population who have attended and completed secondary education, the magnitude being significantly higher in the CEECs as compared to CIS. The largest growth rate was recorded in the sector of tertiary education, albeit, considerable variations across the region are observed. However, notwithstanding the rapid growth of the stock of population with tertiary education, the issue of skill mismatch and skill shortages in particular fields appear to be prevalent in the region. The quality of education appears to be lower than the average EU-18, though, there are economies from the region that outrank many high performing countries. Training as an important source of human capital development has increased significantly over time, though; it remains low compared to high income countries standards

The Impact of Human Capital on Technology-Intensive Exports, with Special Reference to Transition Economies of Central and Eastern Europe

This paper examines the impact of human capital on technology-intensive exports from 27 European countries, with special reference to transition economies of Central and Eastern Europe. The empirical investigation makes use of various human capital and technology-intensive export measures which allows the drawing of more comprehensive inference. To assess the robustness of the results, a diversified modelling strategy is employed. The empirical assessment provides sufficient evidence to support the hypothesized positive link between the share of population who have attained tertiary education and the share of medium and high-technology exports for the full sample of countries, the effect being relatively stronger for the high-technology category. When transition and non-transition economies are assessed separately, the empirical evidence is mixed. The findings from the export sophistication analysis appear to support the importance of the share of population with tertiary education for the export sophistication of non-transition economies only. Some supporting evidence is also found for the positive role of the quality of education

Internationalization of Higher Education: Trends and Strategies

Within the context of broad literature on higher education, this paper discusses some of the issues of the international dimension of higher education. Higher education is becoming increasingly international, as more students are willing to study overseas, enrol in international programmes in their home country, or take cour-ses at universities in other countries by using the internet. Interna-tional higher education has become an issue of negotiation on liberalizing trade in services through GATS, and an important issue for policy makers. Because of its importance on capacity bui-lding, income generation, skilled migration and mutual unders-tanding, many countries have already established strategies to encourage the mobility of students, teachers and programmes