International economic activities and skilled labour demand: evidence from Brazil and China

Using two new firm-level datasets, this article investigates the impact of three international economic activities – the use of imported inputs, exports and foreign direct investment – on skilled labour demand in Brazil and China. We find that Brazilian firms that engage in these activities exhibit a higher skilled labour demand than firms that do not. In contrast, Chinese firms that engage in these activities have a lower skilled labour demand than firms that do not. Thus, international economic activities act as a channel for skill-biased technology diffusion in Brazil but have an effect of specialization according to comparative advantage in unskilled labour-intensive goods in China.