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Outward investments and skill upgrading. Evidence from the Italian case

Author

Listed:
  • Davide Castellani

    (University of Urbino,Italy.)

  • Ilaria Mariotti

    (DIG-Polytechnic University of Milano, Italy.)

  • Lucia Piscitello

    (DIG-Polytechnic University of Milano, Italy.)

Abstract

The present paper investigates the effect of outward investments by Italian manufacturing firms on the domestic employment level and on its skill composition, as measured by the increase in the aggregate share of skilled workers (managers and clerks) in total employment. In doing so, the paper extends the existing empirical literature on the Italian case that has so far provided evidence on the changes in the employment intensity but not on the composition of the domestic employment. We carry out an analysis at the firm level based on the the behaviour of 108 Italian firms, which became multinational for the first time in 1998-2003, investing in either developed countries, CEECs or other developing economies, compared with the behaviour of a counterfactual group of firms constituted by 2,500 national firms that never invested abroad in the considered period. The econometric analysis supports that the internationalisation of activities by manufacturing firms does not reduce their domestic employment, independently of the destination of the investment, and that it may change the division of labour within the firm, thus leading to a higher share of skilled labour intensive activities, especially as a result of investments in CEECs.

Suggested Citation

  • Davide Castellani & Ilaria Mariotti & Lucia Piscitello, 2006. "Outward investments and skill upgrading. Evidence from the Italian case," KITeS Working Papers 185, KITeS, Centre for Knowledge, Internationalization and Technology Studies, Universita' Bocconi, Milano, Italy, revised Nov 2006.
  • Handle: RePEc:cri:cespri:wp185
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Ronald B. Davies & Rodolphe Desbordes, 2012. "Greenfield FDI and skill upgrading," Working Papers 201209, School of Economics, University College Dublin.
    2. Giovanni BELGIOJOSO & Cristina CASTELLI & Sara COLAUTTI & Massimo FLORIO, 2008. "The Natuzzi group and the Bari -Matera (Italy) upholstered furniture district: a case study of internationalisation in a traditional industry," Departmental Working Papers 2008-42, Department of Economics, Management and Quantitative Methods at Università degli Studi di Milano.
    3. Michel, Julie, 2007. "The effects of FDI in R&D on home countries, the case of Switzerland," MPRA Paper 6400, University Library of Munich, Germany.
    4. Ronald B. Davies & Rodolphe Desbordes, 2015. "Greenfield FDI and skill upgrading: A polarized issue," Canadian Journal of Economics, Canadian Economics Association, vol. 48(1), pages 207-244, February.
    5. Giovanni Barbiano di Belgiojoso & Sara Colautti & Massimo Florio & Cristina Castelli, 2008. "The Natuzzi Group and the Bari-Matera (Italy) upholstered furniture district. A case study of internationalisation in a traditional industry," Working Papers 200903, CSIL Centre for Industrial Studies.

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    More about this item

    Keywords

    Foreign direct investment; Employment; Skill-upgrading.;
    All these keywords.

    JEL classification:

    • F2 - International Economics - - International Factor Movements and International Business
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure

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