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

Author

Listed:
  • 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.

Suggested Citation

  • Andrea Filippo Presbitero & Matteo G. Richiardi & Alessia Amighini, 2012. "Is labor flexibility a substitute to offshoring? Evidence from Italian manafacturing," Mo.Fi.R. Working Papers 72, Money and Finance Research group (Mo.Fi.R.) - Univ. Politecnica Marche - Dept. Economic and Social Sciences.
    • Handle: RePEc:anc:wmofir:72
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    2. Edouard Ribes, 2021. "Scoping the transformation of the professional services industry," Working Papers hal-01889350, HAL.

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    More about this item

    Keywords

    cost saving; delocalization; labor flexibility; labor market reforms; offshoring; temporary work;
    All these keywords.

    JEL classification:

    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure

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