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

Author

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

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 F. Presbitero & Matteo G. Richiardi & Alessia Amighini, 2012. "Is labor flexibility a substitute to offshoring? Evidence from Italian manafacturing," LABORatorio R. Revelli Working Papers Series 122, LABORatorio R. Revelli, Centre for Employment Studies.
  • Handle: RePEc:cca:wplabo:122
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    References listed on IDEAS

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    Cited by:

    1. Tanaka, Ayumu, 2017. "Foreign direct investment and temporary workers in Japan," Journal of Asian Economics, Elsevier, vol. 48(C), pages 87-99.

    More about this item

    Keywords

    offshoring; labor flexibility; temporary work; delocalization; labor market reforms; cost saving;

    JEL classification:

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

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