Communication Skills at the Heart of Earnings and Skills Transfer: Evidence from Apparel Industry in Ethiopia

ABSTRACT

This paper explores the impact of local workers’ communication skills (CS) on the transfer of soft and hard skills, and the effect of CS vis-à-vis practical skills (PS) on earnings, drawing on economic sociology. It also investigates the continued importance of CS after a significant reduction in expatriate managers. The findings indicate that CS influences the transfer of soft skills, but not hard skills. Expatriate managers significantly contribute to soft skills transfer, while local supervisors are more prominent in transferring hard skills. CS is important for earnings, regardless of the operator’s PS level, but the returns to PS depend on the CS level. As firms mature and expatriate manager numbers decline the influence of CS diminishes, although it remains crucial in affecting earnings. Enhancing workers’ effective communication and shared language skills, as well as regulating recruited expatriate managers’ CS, or the assigning interpreters, can facilitate both skills transfer and earnings.

KEYWORDS:

• Earnings
• communication & practical skills
• skill transfer

Acknowledgments

Data collection and related activities were sponsored by the Ministry of Education, Culture, Sports, Science and Technology, as well as the Japan Society for the Promotion of Science 15H05142 and 18KK0062. Additionally, the project received non-financial supports from the Ethiopian Textile Industrial Development Institute, the Federal TVET Agency, the Ethiopian Investment Commission, the Industrial Park Development Corporation, and the Ethiopian Textile and Garment Manufacturers Association.

We acknowledge the SKY project team members, including Professor Shoko Yamada, Dr. Yuki Shimazu and Dr. Kyoko Taniguchi, for their roles in the developing data collection tools and collecting data. We are also grateful to Dr. Tesfachew Taffere and Professor Carlos Oya for their valuable comments and suggestions for improving in the draft version of the manuscript. We would like to express our gratitude to the editor and anonymous reviewers for their many insightful comments and suggestions.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Contributors

FND: Monitored data collection for the entire trial, collected administrative data, planned the data collection process, wrote the statistical analysis plan, cleaned and analyzed the data, and drafted and revised the paper. CSO: Revised statistical data analysis, drafted, and revised the paper.

Notes

1 The robustness of our model specification was checked using different Supervised Machine Learning Algorithms (SMLA). The SMLA estimations show that communication and practical skills consistently predicted wages, suggesting that our OLS model is well specified. Upon request these tests results will be available to readers.

Additional information

Funding

The work was supported by the Ministry of Education, Culture, Sports, Science and Technology, Japan Society for the Promotion of Science [15H05142, 18KK0062].