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Is labor flexibility a substitute to offshoring? Evidence from Italian manafacturing

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  • Andrea Filippo Presbitero

    ()
    (Universit… Politecnica delle Marche, MoFiR)

  • Matteo G. Richiardi

    (Universit… di Torino, LABOR)

  • Alessia Amighini

    (Universit… del Piemonte Orientale, SEMeQ)

Abstract

We test whether labor flexibility acts as a substitute to delocalization. Using Italian survey data, we show that a higher share of temporary workers appears to reduce the likelihood of future offshoring. However, once reverse causality and spurious correlation are controlled for with IV techniques, the relationship vanishes. This finding suggests that the threat of delocalization to win support for further labor market reforms is probably misplaced.

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Paper provided by Money and Finance Research group (Mo.Fi.R.) - Univ. Politecnica Marche - Dept. Economic and Social Sciences in its series Mo.Fi.R. Working Papers with number 72.

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Length: 27
Date of creation: Aug 2012
Date of revision:
Handle: RePEc:anc:wmofir:72

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Keywords: cost saving; delocalization; labor flexibility; labor market reforms; offshoring; temporary work;

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