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Migration And The Structure Of Manufacturing Production. A View From Italian Provinces

Author

Listed:
  • Elizabeth Jane Casabianca

    (Prometeia)

  • Alessia Lo Turco

    (Department of Management, Universita' Politecnica delle Marche (Italy))

  • Daniela Maggioni

    (Universita' Cattolica del Sacro Cuore)

Abstract

What is the impact of immigration on the product mix of the receiving economy? To answer this question we exploit variation in the presence of immigrants across Italian provinces within the period 2003-2011. We find that immigration changes the manufacturing output composition of Italian provinces in favour of less capital intensive products, without affecting the total amount of manufacturing production. This result is based on a 2SLS strategy resting on the settlement of immigrants in the pre-sample period and is in line with the predictions of standard trade models concerning the role of factor growth on product specialisation. More specifically, immigrants sustain and deepen Italy's revealed comparative advantages in labour intensive goods. We thus add to the existing studies finding within-industry adjustments of factor usage in production rather than between-industry output adjustments in response to immigration flows. When searching for the underlying mechanisms driving our result, we discover that a larger share of immigrants promotes the local reshoring of labour intensive productions and fosters the creation of new firms in labour intensive industries.

Suggested Citation

  • Elizabeth Jane Casabianca & Alessia Lo Turco & Daniela Maggioni, 2021. "Migration And The Structure Of Manufacturing Production. A View From Italian Provinces," Working Papers 448, Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali.
    • Handle: RePEc:anc:wpaper:448
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    More about this item

    Keywords

    Keywords: Immigration; Local production structure; Capital intensity;
    All these keywords.

    JEL classification:

    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers

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