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Patterns of international fragmentation of production and the relative demand for labor

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  • Helg, Rodolfo
  • Tajoli, Lucia

Abstract

Growing shares of international trade flows consist of intermediate and unfinished goods shipped from one country to another to combine manufacturing or services activities at home with those performed abroad. This configuration of the productive structure has been named “internationally fragmented.” The purpose of our work is to analyze the labor market effects of international fragmentation of production, looking at how it affects relative labor demand. Models of trade due to fragmentation of production suggest that when international fragmentation takes place we might observe a change in the factor proportion in the affected industries. We use outward-processing-trade data - specifically related to international fragmentation of production - to test if the shift in the ratio of skilled and unskilled labor employed in Italy and Germany during the 1990s is related to fragmentation.

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Bibliographic Info

Article provided by Elsevier in its journal The North American Journal of Economics and Finance.

Volume (Year): 16 (2005)
Issue (Month): 2 (August)
Pages: 233-254

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Handle: RePEc:eee:ecofin:v:16:y:2005:i:2:p:233-254

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Web page: http://www.elsevier.com/locate/inca/620163

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  1. Antras, Pol & Helpman, Elhanan, 2004. "Global Sourcing," Scholarly Articles 3196327, Harvard University Department of Economics.
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  8. Rodolfo Helg, 2005. "Patterns of international fragmentation of production and the relative demand for labor," LIUC Papers in Economics 167, Cattaneo University (LIUC).
  9. Deardorff, A.V., 1998. "Fragmentation in Simple Trade Models," Working Papers 422, Research Seminar in International Economics, University of Michigan.
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  23. Salvatore Baldone & Fabio Sdogati & Lucia Tajoli, 2001. "Patterns and determinants of international fragmentation of production: Evidence from outward processing trade between the EU and Central Eastern European countries," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 137(1), pages 80-104, March.
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  25. repec:hrv:faseco:4784029 is not listed on IDEAS
  26. Wilhelm Kohler, 2004. "International outsourcing and factor prices with multistage production," Economic Journal, Royal Economic Society, vol. 114(494), pages C166-C185, 03.
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