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

  • Andrea Filippo Presbitero

    ()

    (Universit… Politecnica delle Marche, MoFiR)

  • Matteo G. Richiardi

    (Universit… di Torino, LABOR)

  • Alessia Amighini

    (Universit… del Piemonte Orientale, SEMeQ)

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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File URL: http://docs.dises.univpm.it/web/quaderni/pdfmofir/Mofir072.pdf
File Function: First version, 2012
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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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  1. Liza Jabbour, 2010. "Offshoring and Firm Performance: Evidence from French Manufacturing Industry," The World Economy, Wiley Blackwell, vol. 33(3), pages 507-524, 03.
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  17. Sourafel Girma & Holger Görg, 2003. "Outsourcing, Foreign Ownership and Productivity: Evidence from UK Establishment Level Data," Discussion Papers of DIW Berlin 361, DIW Berlin, German Institute for Economic Research.
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  27. Jahn, Elke J., 2008. "Reassessing the Wage Penalty for Temps in Germany," IZA Discussion Papers 3663, Institute for the Study of Labor (IZA).
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