IDEAS home Printed from https://ideas.repec.org/a/spr/epolin/v46y2019i4d10.1007_s40812-019-00114-0.html
   My bibliography  Save this article

Ownership and workforce composition: a counterfactual analysis of foreign multinationals and Italian uni-national firms

Author

Listed:
  • Mariachiara Barzotto

    (University of Newcastle)

  • Giancarlo Corò

    (Ca’ Foscari University)

  • Ilaria Mariotti

    (Polytechnic University of Milan)

  • Marco Mutinelli

    (University of Brescia)

Abstract

This article investigates how the ownership of firms (affiliates of foreign multinational firms, or uni-national firms) affects their internal workforce composition. We consider this issue empirically by adopting a novel database on the workforce composition of companies operating in the manufacturing industry in north-east Italy. The workforce composition (in terms of skill level, gender and the less investigated characteristics of age and nationality) of affiliates of foreign multinational enterprises (FMNs) are compared with a counterfactual of uni-national firms, constructed using propensity score matching. Consistent with previous studies, the results report that FMNs recruit a larger number of highly-skilled workers. Our main findings show that FMNs employ a lower number of foreign and less experienced (young) workers. The employment of native and more experienced workers in FMNs seems to suggest that foreign companies use domestic ‘inherited’ stock of manufacturing knowledge and skills. By using this stock, they contribute to sustaining its development.

Suggested Citation

  • Mariachiara Barzotto & Giancarlo Corò & Ilaria Mariotti & Marco Mutinelli, 2019. "Ownership and workforce composition: a counterfactual analysis of foreign multinationals and Italian uni-national firms," Economia e Politica Industriale: Journal of Industrial and Business Economics, Springer;Associazione Amici di Economia e Politica Industriale, vol. 46(4), pages 581-607, December.
    • Handle: RePEc:spr:epolin:v:46:y:2019:i:4:d:10.1007_s40812-019-00114-0
    DOI: 10.1007/s40812-019-00114-0
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s40812-019-00114-0
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1007/s40812-019-00114-0?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Marco Caliendo, 2009. "Start‐up subsidies in East Germany: finally, a policy that works?," International Journal of Manpower, Emerald Group Publishing Limited, vol. 30(7), pages 625-647, November.
    2. Peter Huber & Gabriele Tondl, 2012. "Migration and regional convergence in the European Union," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 39(4), pages 439-460, November.
    3. O'Donnell, Sharon & Blumentritt, Timothy, 1999. "The contribution of foreign subsidiaries to host country national competitiveness," Journal of International Management, Elsevier, vol. 5(3), pages 187-206.
    4. Ceren Ozgen & Peter Nijkamp & Jacques Poot, 2017. "The elusive effects of workplace diversity on innovation," Papers in Regional Science, Wiley Blackwell, vol. 96, pages 29-49, March.
    5. James J. Heckman & Hidehiko Ichimura & Petra E. Todd, 1997. "Matching As An Econometric Evaluation Estimator: Evidence from Evaluating a Job Training Programme," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 64(4), pages 605-654.
    6. de Backer, Koen & Sleuwaegen, Leo, 2003. "Foreign ownership and productivity dynamics," Economics Letters, Elsevier, vol. 79(2), pages 177-183, May.
    7. Sourafel Girma & Holger Görg, 2016. "Evaluating the foreign ownership wage premium using a difference-in-differences matching approach," World Scientific Book Chapters, in: MULTINATIONAL ENTERPRISES AND HOST COUNTRY DEVELOPMENT Volume 53: World Scientific Studies in International Economics, chapter 2, pages 17-32, World Scientific Publishing Co. Pte. Ltd..
    8. de Mello, Luiz R, Jr, 1999. "Foreign Direct Investment-Led Growth: Evidence from Time Series and Panel Data," Oxford Economic Papers, Oxford University Press, vol. 51(1), pages 133-151, January.
    9. Becker, Sascha O. & Ekholm, Karolina & Muendler, Marc-Andreas, 2013. "Offshoring and the onshore composition of tasks and skills," Journal of International Economics, Elsevier, vol. 90(1), pages 91-106.
    10. Andrés Rodríguez-Pose & Viola Berlepsch, 2019. "Does Population Diversity Matter for Economic Development in the Very Long Term? Historic Migration, Diversity and County Wealth in the US," European Journal of Population, Springer;European Association for Population Studies, vol. 35(5), pages 873-911, December.
    11. Jennifer Hunt & Marjolaine Gauthier-Loiselle, 2010. "How Much Does Immigration Boost Innovation?," American Economic Journal: Macroeconomics, American Economic Association, vol. 2(2), pages 31-56, April.
    12. Pekka Ilmakunnas & Mika Maliranta & Jari Vainiomäki, 2004. "The Roles of Employer and Employee Characteristics for Plant Productivity," Journal of Productivity Analysis, Springer, vol. 21(3), pages 249-276, May.
    13. Mari Kangasniemi & Matilde Mas & Catherine Robinson & Lorenzo Serrano, 2012. "The economic impact of migration: productivity analysis for Spain and the UK," Journal of Productivity Analysis, Springer, vol. 38(3), pages 333-343, December.
    14. Alfaro, Laura & Chanda, Areendam & Kalemli-Ozcan, Sebnem & Sayek, Selin, 2004. "FDI and economic growth: the role of local financial markets," Journal of International Economics, Elsevier, vol. 64(1), pages 89-112, October.
    15. Massimiliano Bratti & Chiara Conti, 2018. "The effect of immigration on innovation in Italy," Regional Studies, Taylor & Francis Journals, vol. 52(7), pages 934-947, July.
    16. Berger, Suzanne with the MIT Task Force on Production in the Innovation Economy, 2013. "Making in America: From Innovation to Market," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262019914, December.
    17. Christian Bellak, 2004. "How Domestic and Foreign Firms Differ and Why Does it Matter?," Journal of Economic Surveys, Wiley Blackwell, vol. 18(4), pages 483-514, September.
    18. Kangasniemi, Mari & Mas, Matilde & Robinson, Catherine & Serrano, Lorenzo, 2009. "The Economic Impact of Migration: Productivity Analysis for Spain and the United Kingdom," MPRA Paper 17212, University Library of Munich, Germany.
    19. Luisa Gagliardi & Simona Iammarino, 2018. "Innovation in risky markets: ownership and location advantages in the UK regions," Journal of Economic Geography, Oxford University Press, vol. 18(5), pages 1177-1201.
    20. Blomström, Magnus & Kokko, Ari, 2003. "Human Capital and Inward FDI," EIJS Working Paper Series 167, Stockholm School of Economics, The European Institute of Japanese Studies.
    21. Davide Castellani & Antonello Zanfei, 2006. "Multinational Firms, Innovation and Productivity," Books, Edward Elgar Publishing, number 3709.
    22. Head, Keith & Ries, John, 2002. "Offshore production and skill upgrading by Japanese manufacturing firms," Journal of International Economics, Elsevier, vol. 58(1), pages 81-105, October.
    23. J. Bradford Jensen & Lori G. Kletzer, 2010. "Measuring Tradable Services and the Task Content of Offshorable Services Jobs," NBER Chapters, in: Labor in the New Economy, pages 309-335, National Bureau of Economic Research, Inc.
    24. Steven Globerman & John C. Ries & Ilan Vertinsky, 1994. "The Economic Performance of Foreign Affiliates in Canada," Canadian Journal of Economics, Canadian Economics Association, vol. 27(1), pages 143-156, February.
    25. Edward Kasabov & Usha Sundaram, 2016. "Conceptualizing Clusters as Dynamic and Path-Dependent Pools of Skills," Regional Studies, Taylor & Francis Journals, vol. 50(9), pages 1520-1536, September.
    26. Luisa Gagliardi, 2015. "Does skilled migration foster innovative performance? Evidence from British local areas," Papers in Regional Science, Wiley Blackwell, vol. 94(4), pages 773-794, November.
    27. Giovanni Peri, 2016. "The Effect Of Immigration On Productivity: Evidence From U.S. States," World Scientific Book Chapters, in: The Economics of International Migration, chapter 8, pages 265-275, World Scientific Publishing Co. Pte. Ltd..
    28. Alan S. Blinder, 2009. "How Many US Jobs Might be Offshorable?," World Economics, World Economics, 1 Ivory Square, Plantation Wharf, London, United Kingdom, SW11 3UE, vol. 10(2), pages 41-78, April.
    29. William R. Kerr & William F. Lincoln, 2010. "The Supply Side of Innovation: H-1B Visa Reforms and U.S. Ethnic Invention," Journal of Labor Economics, University of Chicago Press, vol. 28(3), pages 473-508, July.
    30. Bosetti, Valentina & Cattaneo, Cristina & Verdolini, Elena, 2015. "Migration of skilled workers and innovation: A European Perspective," Journal of International Economics, Elsevier, vol. 96(2), pages 311-322.
    31. Mariani, Myriam & Romanelli, Marzia, 2007. ""Stacking" and "picking" inventions: The patenting behavior of European inventors," Research Policy, Elsevier, vol. 36(8), pages 1128-1142, October.
    32. Iammarino, Simona & Rodríguez-Pose, Andrés & Gagliardi, Luisa, 2015. "Offshoring and the Geography of Jobs in Great Britain," CEPR Discussion Papers 10855, C.E.P.R. Discussion Papers.
    33. Carlo Dell’Aringa & Claudio Lucifora & Laura Pagani, 2015. "Earnings differentials between immigrants and natives: the role of occupational attainment," IZA Journal of Migration and Development, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 4(1), pages 1-18, December.
    34. Rachel Griffith & Helen Simpson, 2004. "Characteristics of Foreign-Owned Firms in British Manufacturing," NBER Chapters, in: Seeking a Premier Economy: The Economic Effects of British Economic Reforms, 1980–2000, pages 147-180, National Bureau of Economic Research, Inc.
    35. Yannu Zheng & Olof Ejermo, 2015. "How do the foreign-born perform in inventive activity? Evidence from Sweden," Journal of Population Economics, Springer;European Society for Population Economics, vol. 28(3), pages 659-695, July.
    36. Rosa Forte & Rui Moura, 2013. "The Effects Of Foreign Direct Investment On The Host Country'S Economic Growth: Theory And Empirical Evidence," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 58(03), pages 1-28.
    37. Giorgio Barba Navaretti & Anthony J. Venables, 2006. "Facts and Issues, from Multinational Firms in the World Economy," Introductory Chapters, in: Multinational Firms in the World Economy, Princeton University Press.
    38. Robert-Nicoud, Frédéric, 2008. "Offshoring of routine tasks and (de)industrialisation: Threat or opportunity--And for whom?," Journal of Urban Economics, Elsevier, vol. 63(2), pages 517-535, March.
    39. Sandra Nieto & Alessia Matano & Raul Ramos, 2013. "“Skill mismatches in the EU: Immigrants vs. natives”," AQR Working Papers 201310, University of Barcelona, Regional Quantitative Analysis Group, revised Oct 2013.
    40. Benjamin F. Jones, 2010. "Age and Great Invention," The Review of Economics and Statistics, MIT Press, vol. 92(1), pages 1-14, February.
    41. Ivan Etzo & Carla Massidda & Paolo Mattana & Romano Piras, 2017. "The impact of immigration on output and its components: a sectoral analysis for Italy at regional level," Economia Politica: Journal of Analytical and Institutional Economics, Springer;Fondazione Edison, vol. 34(3), pages 533-564, December.
    42. Robert E. Baldwin & Robert E. Lipsey & J. David Richardson, 1998. "Geography and Ownership as Bases for Economic Accounting," NBER Books, National Bureau of Economic Research, Inc, number bald98-1, March.
    43. Mariya Aleksynska & Ahmed Tritah, 2015. "The Heterogeneity Of Immigrants, Host Countries' Income And Productivity: A Channel Accounting Approach," Economic Inquiry, Western Economic Association International, vol. 53(1), pages 150-172, January.
    44. Annekatrin Niebuhr, 2010. "Migration and innovation: Does cultural diversity matter for regional R&D activity?," Papers in Regional Science, Wiley Blackwell, vol. 89(3), pages 563-585, August.
    45. Paul H. Jensen, 2014. "Understanding the Impact of Migration on Innovation," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 47(2), pages 240-250, June.
    46. Dan V Caprar, 2011. "Foreign locals: A cautionary tale on the culture of MNC local employees," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 42(5), pages 608-628, June.
    47. Roberto Basile & Luigi Benfratello & Davide Castellani, 2005. "Attracting Foreign Direct Investments in Europe: Are Italian Regions Doomed?," Rivista di Politica Economica, SIPI Spa, vol. 95(1), pages 319-319, January-F.
    48. Giuri, Paola & Mariani, Myriam & Brusoni, Stefano & Crespi, Gustavo & Francoz, Dominique & Gambardella, Alfonso & Garcia-Fontes, Walter & Geuna, Aldo & Gonzales, Raul & Harhoff, Dietmar & Hoisl, Karin, 2007. "Inventors and invention processes in Europe: Results from the PatVal-EU survey," Research Policy, Elsevier, vol. 36(8), pages 1107-1127, October.
    49. Luca De Benedictis, 2005. "Three Decades of Italian Comparative Advantages," The World Economy, Wiley Blackwell, vol. 28(11), pages 1679-1709, November.
    50. Driffield, Nigel & Taylor, Karl, 2000. "FDI and the Labour Market: A Review of the Evidence and Policy Implications," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 16(3), pages 90-103, Autumn.
    51. Rosario Crinò & Fabrizio Onida, 2007. "Foreign Ownership and Economic Performance in Italy: Not all is Cherry-Picking!," KITeS Working Papers 207, KITeS, Centre for Knowledge, Internationalization and Technology Studies, Universita' Bocconi, Milano, Italy, revised Nov 2007.
    52. M Daniele Paserman, 2013. "Do high-skill immigrants raise productivity? Evidence from Israeli manufacturing firms, 1990-1999," IZA Journal of Migration and Development, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 2(1), pages 1-31, December.
    53. Henseke, Golo & Tivig, Thusnelda, 2007. "Demographic change and industry-specific innovation patterns in Germany," Thuenen-Series of Applied Economic Theory 72, University of Rostock, Institute of Economics.
    54. Natália Barbosa & Helen Louri, 2005. "Corporate Performance: Does Ownership Matter? A Comparison of Foreign- and Domestic-Owned Firms in Greece and Portugal," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 27(1), pages 73-102, August.
    55. Zimmermann, Klaus F. (ed.), 2005. "European Migration: What Do We Know?," OUP Catalogue, Oxford University Press, number 9780199257355.
    56. Kevin Sylwester, 2005. "Foreign direct investment, growth and income inequality in less developed countries," International Review of Applied Economics, Taylor & Francis Journals, vol. 19(3), pages 289-300.
    57. Sergio Mariotti & Marco Mutinelli & Lucia Piscitello, 2008. "The Internationalization of Production by Italian Industrial Districts' Firms: Structural and Behavioural Determinants," Regional Studies, Taylor & Francis Journals, vol. 42(5), pages 719-735.
    58. Becker Sascha O & Muendler Marc-Andreas, 2008. "The Effect of FDI on Job Security," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 8(1), pages 1-46, April.
    59. Giorgio Barba Navaretti & Anthony J. Venables, 2006. "Multinational Firms in the World Economy," Economics Books, Princeton University Press, edition 1, volume 1, number 7832.
    60. Sascha O. Becker & Andrea Ichino, 2002. "Estimation of average treatment effects based on propensity scores," Stata Journal, StataCorp LP, vol. 2(4), pages 358-377, November.
    61. Ozturk, I., 2007. "Foreign Direct Investment – Growht Nexus: A Review of The Recent Literature," International Journal of Applied Econometrics and Quantitative Studies, Euro-American Association of Economic Development, vol. 4(2), pages 79-98.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Ilaria Mariotti & Mariachiara Barzotto & Giancarlo Corò & Stefano Saloriani, 2020. "Industrial districts, urban areas or both? The location behaviour of foreign and domestic firms in an Italian manufacturing region," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 64(3), pages 523-546, June.
    2. Dante Di Matteo & Ilaria Mariotti, 2021. "Italian discontent and right‐wing populism: determinants, geographies, patterns," Regional Science Policy & Practice, Wiley Blackwell, vol. 13(2), pages 371-396, April.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Mariachiara Barzotto & Giancarlo Corò & Ilaria Mariotti & Marco Mutinelli, 2016. "The impact of Inward FDI on host country labour markets. A counterfactual analysis on Italian manufacturing companies," Working Papers 1612, c.MET-05 - Centro Interuniversitario di Economia Applicata alle Politiche per L'industria, lo Sviluppo locale e l'Internazionalizzazione.
    2. Nathan, Max, 2013. "The Wider Economic Impacts of High-Skilled Migrants: A Survey of the Literature," IZA Discussion Papers 7653, Institute of Labor Economics (IZA).
    3. Fassio, Claudio & Montobbio, Fabio & Venturini, Alessandra, 2019. "Skilled migration and innovation in European industries," Research Policy, Elsevier, vol. 48(3), pages 706-718.
    4. Alessandra Venturini & Claudio Fassio & Fabio Montobbio, 2015. "How do Native and Migrant Workers Contribute to Innovation? A Study on France, Germany and the UK," Discussion Papers 30, Central European Labour Studies Institute (CELSI).
    5. Dr Max Nathan, 2013. "The wider economic impacts of high-skilled migrants: a survey of the literature," National Institute of Economic and Social Research (NIESR) Discussion Papers 413, National Institute of Economic and Social Research.
    6. Claudio Fassio & Sona Kalantaryan & Alessandra Venturini, 2020. "Foreign Human Capital and Total Factor Productivity: A Sectoral Approach," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 66(3), pages 613-646, September.
    7. Fassio, Claudio & Montobbio, Fabio & Venturini, Alessandra, 2015. "How Do Native and Migrant Workers Contribute to Innovation?," Department of Economics and Statistics Cognetti de Martiis. Working Papers 201520, University of Turin.
    8. Nathan, Max, 2013. "The Wider Economic Impacts of High-Skilled Migrants: A Survey of the Literature," IZA Discussion Papers 7653, Institute of Labor Economics (IZA).
    9. Junbing Xu & Zhongmei Wei & Haitang Yao, 2022. "Can international students help enhance China's urban innovation?," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 43(6), pages 2421-2433, September.
    10. Fornaro, Paolo & Maliranta, Mika & Rouvinen, Petri, 2019. "Immigrant Innovators and Firm Performance," ETLA Working Papers 63, The Research Institute of the Finnish Economy.
    11. Wei, Hao & Yuan, Ran & Zhao, Laixun, 2020. "International talent inflow and R&D investment: Firm-level evidence from China," Economic Modelling, Elsevier, vol. 89(C), pages 32-42.
    12. Alessandra Venturini & Claudio Fassio & Sona Kalantaryan, 2015. "Human Resources and Innovation: Total Factor Productivity and Foreign Human Capital," Discussion Papers 29, Central European Labour Studies Institute (CELSI).
    13. Caviggioli, Federico & Jensen, Paul & Scellato, Giuseppe, 2020. "Highly skilled migrants and technological diversification in the US and Europe," Technological Forecasting and Social Change, Elsevier, vol. 154(C).
    14. Max Nathan, 2014. "The wider economic impacts of high-skilled migrants: a survey of the literature for receiving countries," IZA Journal of Migration and Development, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 3(1), pages 1-20, December.
    15. Ceren Ozgen, 2021. "The economics of diversity: Innovation, productivity and the labour market," Journal of Economic Surveys, Wiley Blackwell, vol. 35(4), pages 1168-1216, September.
    16. Claudio Fassio & Alessandra Venturini, 2015. "Do native and migrant workers contribute to innovation? Patents dynamic in France, Germany and the UK," RSCAS Working Papers 2015/41, European University Institute.
    17. Malgorzata Wachowska & Magdalena Homa, 2020. "The Role of Ethnic Diversity in Stimulating Innovation Processes: Comparative Analysis of Poland, the Czech Republic and Hungary," European Research Studies Journal, European Research Studies Journal, vol. 0(4), pages 1157-1176.
    18. Wulong Gu & Feng Hou & Garnett Picot, 2020. "Immigration and firm productivity: evidence from the Canadian Employer-Employee Dynamics Database," Journal of Productivity Analysis, Springer, vol. 54(2), pages 121-137, December.
    19. Yang, Gaoju & Wang, Fang & Huang, Xianhai & Chen, Hangyu, 2022. "Human capital inflow, firm innovation and patent mix," Journal of Asian Economics, Elsevier, vol. 79(C).
    20. Ronald B. Davies & Rodolphe Desbordes, 2015. "Greenfield FDI and skill upgrading: A polarized issue," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 48(1), pages 207-244, February.

    More about this item

    Keywords

    Foreign direct investments; Company workforce composition; Manufacturing; Veneto region;
    All these keywords.

    JEL classification:

    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • L6 - Industrial Organization - - Industry Studies: Manufacturing

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:epolin:v:46:y:2019:i:4:d:10.1007_s40812-019-00114-0. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.