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Choosing between foreign investment and subcontracting: Strategies of Italian firms in Romania

  • Tattara, Giuseppe

Vertical disintegration in most industries and the globalization of markets has led to significant changes in the pattern of international division of labour among manufacturing firms. At the same time increased competition from low cost producers, exchange rate constraints, the opening up of CEE countries have had huge consequences for the Italian industrial system. This paper deals with the Veneto footwear, furniture and refrigeraion industries and examines the effects of foreign direct investments and subcontracting in Romania. The reorganization of the division of labour, in the most dynamic suppliers induced a change in the “nature of subcontracting”, upgrading along the ladder of the value chain as more and more operations are offshored.

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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 23787.

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Date of creation: 28 Jun 2010
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Handle: RePEc:pra:mprapa:23787
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  1. Graziani, Giovanni, 1998. "Globalization of Production in the Textile and Clothing Industries: The Case of Italian Foreign Direct Investment and Outward Processing in Eastern Europe," UCAIS Berkeley Roundtable on the International Economy, Working Paper Series qt5cr30690, UCAIS Berkeley Roundtable on the International Economy, UC Berkeley.
  2. Rosa Forte & António Brandão, 2005. "Choosing between Foreign Direct Investment and International Subcontracting. A Model of a Multinational Firm's Decision in a Context of Moral Hazard," CEF.UP Working Papers 0506, Universidade do Porto, Faculdade de Economia do Porto.
  3. Florentina Constantin & Giovanna Giusti & Giuseppe Tattara, 2010. "Strategies of Italian Firms in Romania: Evidence from Selected Case Studies," Transition Studies Review, Springer, vol. 16(4), pages 829-847, February.
  4. Scott, Allen J., 2006. "The Changing Global Geography of Low-Technology, Labor-Intensive Industry: Clothing, Footwear, and Furniture," World Development, Elsevier, vol. 34(9), pages 1517-1536, September.
  5. James R. Markusen & Anthony J. Venables, 1997. "Foreign Direct Investment as a Catalyst for Industrial Development," NBER Working Papers 6241, National Bureau of Economic Research, Inc.
  6. Giuseppe Tattara, 2005. "Emerging Hubs in Central-Eastern Europe, Trade Blocs and Financial Co-operation," Industrial Organization 0511013, EconWPA.
  7. Lawton Thomas C & McGuire Steven M, 2005. "Adjusting to Liberalization: Tracing the Impact of the WTO on the European Textiles and Chemicals Industries," Business and Politics, De Gruyter, vol. 7(2), pages 1-25, August.
  8. Vining, Aidan & Globerman, steven, 1999. "A conceptual framework for understanding the outsourcing decision," European Management Journal, Elsevier, vol. 17(6), pages 645-654, December.
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