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Importing Jobs And Exporting Firms? On The Wage And Employment Implications Of Italy’S Trade And Foreign Direct Investment Flows

  • Riccardo Faini

    (IMF & Brescia University)

  • Anna M. Falzoni

    (Bergamo University & CESPRI-Bocconi University)

  • Marzio Galeotti

    (Bergamo University)

  • Rodolfo Helg

    (Cattaneo University-LIUC & CESPRI-Bocconi University)

  • Alessandro Turrini

    (Bergamo University)

International economic integration is often blamed for the deteriorating fortunes of unskilled workers in industrial countries. We look at the labor market impact of trade and foreign direct investment in the case of Italy. Our empirical framework allows for trade, technology and factor supply effects. We find that international trade did not contribute to Italy’s labor market problems. Indeed, given that Italy holds quite a distinct pattern of trade specialization, compared to other industrialized countries, international integration as reflected in falling import prices may have boosted the demand for labor there. We also argue that the inability of the Mezzogiorno’s economy to adjust to the changing international environment is one of the main stumbling blocks in Italy’s economy. Finally, we find that greater firm’s mobility may have weakened the power of trade unions and contributed to wage moderation.

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File URL: http://128.118.178.162/eps/it/papers/0103/0103002.pdf
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Paper provided by EconWPA in its series International Trade with number 0103002.

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Length: 34 pages
Date of creation: 04 Mar 2001
Date of revision:
Handle: RePEc:wpa:wuwpit:0103002
Note: Type of Document - Acrobat PDF file; prepared on IBM PC ; to print on A4 paper; pages: 34 ; figures: included. preliminary version of the paper published in Giornale degli Economisti e Annali dell'Economia, vol.58, no.1,Aprile 1999.
Contact details of provider: Web page: http://128.118.178.162

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  1. Donald R. Davis, 1996. "Trade Liberalization and Income Distribution," NBER Working Papers 5693, National Bureau of Economic Research, Inc.
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  4. Deardorff, A.V., 1997. "Factor Prices and the Factor Content of Trade Revisited: What's the Use?," Working Papers 409, Research Seminar in International Economics, University of Michigan.
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  12. Stephen Nickell, 1997. "Unemployment and Labor Market Rigidities: Europe versus North America," Journal of Economic Perspectives, American Economic Association, vol. 11(3), pages 55-74, Summer.
  13. David A. Riker & S. Lael Brainard, 1997. "U.S. Multinationals and Competition from Low Wage Countries," NBER Working Papers 5959, National Bureau of Economic Research, Inc.
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  15. Gene M. Grossman, 1982. "The Employment and Wage Effects of Import Competition in the United States," NBER Working Papers 1041, National Bureau of Economic Research, Inc.
  16. Revenga, Ana L, 1992. "Exporting Jobs? The Impact of Import Competition on Employment and Wages in U.S. Manufacturing," The Quarterly Journal of Economics, MIT Press, vol. 107(1), pages 255-84, February.
  17. Epifani Paolo, 1999. "Sulle determinanti del modello di specializzazione internazionale dell'Italia," Politica economica - Journal of Economic Policy (PEJEP), Società editrice il Mulino, issue 2, pages 195-224.
  18. Matthew J. Slaughter, 1997. "International Trade and Labor-Demand Elasticities," NBER Working Papers 6262, National Bureau of Economic Research, Inc.
  19. Mary Amiti, 1997. "Specialisation Patterns in Europe," CEP Discussion Papers dp0363, Centre for Economic Performance, LSE.
  20. Phillip Swagel & Matthew J. Slaughter, 1997. "The Effect of Globilizationon Wages in the Advanced Economies," IMF Working Papers 97/43, International Monetary Fund.
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  22. Leamer, E.E., 1995. "The Heckscher-Ohlin Model in Theory and Practice," Princeton Studies in International Economics 77, International Economics Section, Departement of Economics Princeton University,.
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