IDEAS home Printed from
MyIDEAS: Login to save this article or follow this journal

The impact of outward FDI on the home country's labour demand and skill composition

  • Elia, Stefano
  • Mariotti, Ilaria
  • Piscitello, Lucia

The present paper adds to the literature investigating the effects of outward FDI on the home country employment and skill composition. Considering the "industrial region" as the unit of the analysis, we capture both direct and indirect effects of foreign production on the parent company and its environment. The empirical evidence refers to the internationalisation of production by Italian firms throughout the period 1996-2002, and it shows that foreign activities have a negative impact upon the demand for low skilled workers in the parent company's "industrial region", but also on the demand for high skilled workers when FDI are addressed to high income countries.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL:
Download Restriction: Full text for ScienceDirect subscribers only

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Article provided by Elsevier in its journal International Business Review.

Volume (Year): 18 (2009)
Issue (Month): 4 (August)
Pages: 357-372

in new window

Handle: RePEc:eee:iburev:v:18:y:2009:i:4:p:357-372
Contact details of provider: Web page:

Order Information: Postal:

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

as in new window
  1. Laura Alfaro & Andrew Charlton, 2007. "Intra-industry foreign direct investment," LSE Research Online Documents on Economics 19690, London School of Economics and Political Science, LSE Library.
  2. repec:tpr:qjecon:v:114:y:1999:i:3:p:907-940 is not listed on IDEAS
  3. David H. Autor & Lawrence F. Katz & Alan B. Krueger, 1997. "Computing Inequality: Have Computers Changed the Labor Market?," NBER Working Papers 5956, National Bureau of Economic Research, Inc.
  4. Tain-Jy Chen & Ying-Hua Ku, 2003. "The Effects of Overseas Investment on Domestic Employment," NBER Working Papers 10156, National Bureau of Economic Research, Inc.
  5. repec:tpr:qjecon:v:110:y:1995:i:4:p:1075-1110 is not listed on IDEAS
  6. Pär Hansson, 2005. "Skill Upgrading and Production Transfer within Swedish Multinationals," Scandinavian Journal of Economics, Wiley Blackwell, vol. 107(4), pages 673-692, December.
  7. Nigel Driffield, 2006. "On the search for spillovers from foreign direct investment (FDI) with spatial dependency," Regional Studies, Taylor & Francis Journals, vol. 40(1), pages 107-119.
  8. Piva, Mariacristina & Santarelli, Enrico & Vivarelli, Marco, 2003. "The Skill Bias Effect of Technological and Organisational Change: Evidence and Policy Implications," IZA Discussion Papers 934, Institute for the Study of Labor (IZA).
  9. Rodolfo Helg & Lucia Tajoli, 2002. "Patterns of International Fragmentation of Production and Implications for the Labor Markets," Working Papers 503, Research Seminar in International Economics, University of Michigan.
  10. repec:tpr:qjecon:v:109:y:1994:i:2:p:367-97 is not listed on IDEAS
  11. 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.
  12. Mariacristina Piva & Marco Vivarelli, 2004. "The determinants of the skill bias in Italy: R&D, organisation or globalisation?," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 13(4), pages 329-347.
  13. repec:tpr:qjecon:v:107:y:1992:i:1:p:35-78 is not listed on IDEAS
  14. Vanessa Strauss-Kahn, 2003. "The Role of Globalization in the Within-Industry Shift Away from Unskilled Workers in France," NBER Working Papers 9716, National Bureau of Economic Research, Inc.
  15. 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.
  16. Christensen, Laurits R & Jorgenson, Dale W & Lau, Lawrence J, 1973. "Transcendental Logarithmic Production Frontiers," The Review of Economics and Statistics, MIT Press, vol. 55(1), pages 28-45, February.
  17. Blomstrom, Magnus & Fors, Gunnar & Lipsey, Robert E, 1997. "Foreign Direct Investment and Employment: Home Country Experience in the United States and Sweden," Economic Journal, Royal Economic Society, vol. 107(445), pages 1787-97, November.
  18. Braconier, Henrik & Norback, Pehr-Johan & Urban, Dieter, 2005. "Multinational enterprises and wage costs: vertical FDI revisited," Journal of International Economics, Elsevier, vol. 67(2), pages 446-470, December.
  19. Ekholm, Karolina & Hakkala, Katariina, 2006. "The Effect of Offshoring on Labour Demand: Evidence from Sweden," CEPR Discussion Papers 5648, C.E.P.R. Discussion Papers.
  20. Castellani, Davide & Mariotti, Ilaria & Piscitello, Lucia, 2008. "The impact of outward investments on parent company's employment and skill composition: Evidence from the Italian case," Structural Change and Economic Dynamics, Elsevier, vol. 19(1), pages 81-94, March.
  21. Katz, L.F. & Murphy, K.M., 1991. "Changes in Relative Wages, 1963-1987: Supply and Demand Factors," Harvard Institute of Economic Research Working Papers 1580, Harvard - Institute of Economic Research.
  22. Hansson, Pär, 2001. "Skill Upgrading and Production Transfer within Swedish Multinationals in the 1990s," Working Paper Series 166, Trade Union Institute for Economic Research.
  23. Machin, S. & Van Reenen, J., 1997. "Technology and Changes in Skill Structure: Evidence from Seven OECD Countries," Papers 24, Centre for Economic Performance & Institute of Economics.
  24. Alexander Hijzen & Holger Görg & Robert C. Hine, 2004. "International Outsourcing and the Skill Structure of Labour Demand in the United Kingdom," Discussion Papers of DIW Berlin 437, DIW Berlin, German Institute for Economic Research.
  25. Rodriguez-Clare, Andres, 1996. "Multinationals, Linkages, and Economic Development," American Economic Review, American Economic Association, vol. 86(4), pages 852-73, September.
  26. Bardhan, Ashok Deo & Kroll, Cynthia, 2003. "The New Wave of Outsourcing," Fisher Center for Real Estate & Urban Economics, Research Reports qt02f8z392, Fisher Center for Real Estate & Urban Economics, UC Berkeley.
  27. Robert C. Feenstra & Gordon H. Hanson, 1996. "Globalization, Outsourcing, and Wage Inequality," NBER Working Papers 5424, National Bureau of Economic Research, Inc.
  28. Anderton, Bob & Brenton, Paul, 1999. "Outsourcing and Low-Skilled Workers in the UK," Bulletin of Economic Research, Wiley Blackwell, vol. 51(4), pages 267-85, October.
  29. Robert Feenstra & Gordon Hanson, 2001. "Global Production Sharing and Rising Inequality: A Survey of Trade and Wages," NBER Working Papers 8372, National Bureau of Economic Research, Inc.
  30. Sergio Mariotti & Marco Mutinelli & Lucia Piscitello, 2003. "Home country employment and foreign direct investment: evidence from the Italian case," Cambridge Journal of Economics, Oxford University Press, vol. 27(3), pages 419-431, May.
  31. Nigel Driffield & James Love & Karl Taylor, 2008. "Productivity and Labour Demand Effects of Inward and Outward FDI on UK Industry," Working Papers 2008001, The University of Sheffield, Department of Economics, revised Jan 2008.
  32. Sanghoon Ahn & Kyoji Fukao & Keiko Ito, 2008. "Outsourcing in East Asia and its impact on the Japanese and Korean Labour Markets," OECD Trade Policy Papers 65, OECD Publishing.
  33. Slaughter, Matthew J., 2000. "Production transfer within multinational enterprises and American wages," Journal of International Economics, Elsevier, vol. 50(2), pages 449-472, April.
  34. E. Paul Durrenberger, 2005. "Labour," Chapters, in: A Handbook of Economic Anthropology, chapter 8 Edward Elgar.
  35. Margit Molnár & Nigel Pain & Daria Taglioni, 2007. "The Internationalisation of Production, International Outsourcing and Employment in the OECD," OECD Economics Department Working Papers 561, OECD Publishing.
  36. Bound, John & Johnson, George, 1992. "Changes in the Structure of Wages in the 1980's: An Evaluation of Alternative Explanations," American Economic Review, American Economic Association, vol. 82(3), pages 371-92, June.
  37. Bönte, Werner, 2008. "Inter-firm trust in buyer-supplier relations: Are knowledge spillovers and geographical proximity relevant?," Journal of Economic Behavior & Organization, Elsevier, vol. 67(3-4), pages 855-870, September.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:eee:iburev:v:18:y:2009:i:4:p:357-372. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei)

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 references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link 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 profile, as there may be some citations waiting for confirmation.

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

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.