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

  • Andrea F. Presbitero
  • Matteo G. Richiardi
  • Alessia Amighini

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 LABORatorio R. Revelli, Centre for Employment Studies in its series LABORatorio R. Revelli Working Papers Series with number 122.

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Date of creation: 2012
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Handle: RePEc:cca:wplabo:122
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  1. Fabio Berton & Francesco Devicienti & Lia Pacelli, 2011. "Are temporary jobs a port of entry into permanent employment?: Evidence from matched employer-employee," International Journal of Manpower, Emerald Group Publishing, vol. 32(8), pages 879-899, November.
  2. Becker, Sascha & Ekholm, Karolina & Muendler, Marc-Andreas, 2012. "Offshoring and the Onshore Composition of Tasks and Skills," CAGE Online Working Paper Series 97, Competitive Advantage in the Global Economy (CAGE).
  3. Luigi Benfratello & Tiziano Razzolini & Alessandro Sembenelli, 2009. "Does ICT Investment Spur or Hamper Offshoring? Empirical Evidence from Microdata," Working papers 5, Former Department of Economics and Public Finance "G. Prato", University of Torino.
  4. Lo Turco, A. & Maggioni, D. & Picchio, M., 2012. "Offshoring and Job Stability : Evidence from Italian Manufacturing," Discussion Paper 2012-034, Tilburg University, Center for Economic Research.
  5. Görg, Holger & Hanley, Aoife & Strobl, Eric, 2007. "Productivity Effects of International Outsourcing: Evidence from Plant Level Data," CEPR Discussion Papers 6361, C.E.P.R. Discussion Papers.
  6. Aart Kraay, 2012. "Instrumental variables regressions with uncertain exclusion restrictions: a Bayesian approach," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 27(1), pages 108-128, 01.
  7. Alexander Hijzen & Holger Görg & Robert C. Hine, 2005. "International Outsourcing and the Skill Structure of Labour Demand in the United Kingdom," Economic Journal, Royal Economic Society, vol. 115(506), pages 860-878, October.
  8. Sourafel Girma & Holger Görg, 2004. "Outsourcing, Foreign Ownership, and Productivity: Evidence from UK Establishment-level Data," Review of International Economics, Wiley Blackwell, vol. 12(5), pages 817-832, November.
  9. Hea-Jung Hyun, 2010. "Firm Heterogeneity in the Choice of Offshoring: Evidence from Korean Manufacturing Firms," Asian Economic Papers, MIT Press, vol. 9(1), pages 157-178, January.
  10. Eiichi Tomiura, 2004. "Foreign outsourcing and firm-level characteristics: evidence from Japanese manufacturers," Hi-Stat Discussion Paper Series d04-64, Institute of Economic Research, Hitotsubashi University.
  11. Liza Jabbour, 2010. "Offshoring and Firm Performance: Evidence from French Manufacturing Industry," The World Economy, Wiley Blackwell, vol. 33(3), pages 507-524, 03.
  12. Geishecker, Ingo, 2008. "The impact of international outsourcing on individual employment security: A micro-level analysis," Labour Economics, Elsevier, vol. 15(3), pages 291-314, June.
  13. 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.
  14. Jahn, Elke J., 2008. "Reassessing the Wage Penalty for Temps in Germany," IZA Discussion Papers 3663, Institute for the Study of Labor (IZA).
  15. Pietro Alessandrini & Andrea F. Presbitero & Alberto Zazzaro, 2009. "Banks, Distances and Firms' Financing Constraints," Review of Finance, European Finance Association, vol. 13(2), pages 261-307.
  16. Holl, Adelheid, 2008. "Production subcontracting and location," Regional Science and Urban Economics, Elsevier, vol. 38(3), pages 299-309, May.
  17. Eduardo Pol & Peter Carroll & Paul Robertson, 2002. "A New Typology for Economic Sectors with a view to Policy Implications," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 11(1), pages 61-76.
  18. Gene M. Grossman & Esteban Rossi-Hansberg, 2006. "Trading Tasks: A Simple Theory of Offshoring," NBER Working Papers 12721, National Bureau of Economic Research, Inc.
  19. Alexander Hijzen, & Tomohiko Inui, & Yasuyuki Todo, . "Does Offshoring Pay? Firm-Level Evidence From Japan," Discussion Papers 07/14, University of Nottingham, GEP.
  20. José Varejão & Pedro Portugal, 2003. "Why Do Firms Use Fixed-Term Contracts?," CEF.UP Working Papers 0310, Universidade do Porto, Faculdade de Economia do Porto.
  21. Douglas Staiger & James H. Stock, 1994. "Instrumental Variables Regression with Weak Instruments," NBER Technical Working Papers 0151, National Bureau of Economic Research, Inc.
  22. Francesco Daveri & Cecilia Jona-Lasinio, 2008. "Off-Shoring and Productivity Growth in the Italian Manufacturing Industries," Working Papers 339, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
  23. Giorgio Barba Navaretti & Giuseppe Bertola & Alessandro Sembenelli, 2008. "Offshoring and Immigrant Employment: Firm-level Theory and Evidence," Development Working Papers 245, Centro Studi Luca d\'Agliano, University of Milano.
  24. Pär Hansson, 2005. "Skill Upgrading and Production Transfer within Swedish Multinationals," Scandinavian Journal of Economics, Wiley Blackwell, vol. 107(4), pages 673-692, December.
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  26. Bergljot Barkbu & Jesmin Rahman & Rodrigo O. Valdés, 2012. "Fostering Growth in Europe Now," IMF Staff Discussion Notes 12/07, International Monetary Fund.
  27. Fabio Berton & Francesco Devicienti & Lia Pacelli, 2009. "Are Temporary Jobs a Port of Entry into Permanent Employment? Evidence from Matched Employer-Employee Data," Working papers 6, Former Department of Economics and Public Finance "G. Prato", University of Torino.
  28. repec:dgr:kubcen:2012034 is not listed on IDEAS
  29. Christopher F Baum & Mark E Schaffer & Steven Stillman, 2002. "IVREG2: Stata module for extended instrumental variables/2SLS and GMM estimation," Statistical Software Components S425401, Boston College Department of Economics, revised 30 Jul 2015.
  30. Mitra, Devashish & Ranjan, Priya, 2010. "Offshoring and unemployment: The role of search frictions labor mobility," Journal of International Economics, Elsevier, vol. 81(2), pages 219-229, July.
  31. MACHIKITA Tomohiro & SATO Hitoshi, 2011. "Temporary Jobs and Globalization: Evidence from Japan," Discussion papers 11029, Research Institute of Economy, Trade and Industry (RIETI).
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