Firing at Subcontractors? Spillover Employment Effects of Offshoring in Italy

Centro Studi Luca d'Agliano Development Studies Working Paper No. 238

22 Pages Posted: 11 Dec 2008

See all articles by Stefano Costa

Stefano Costa

ISTAT - Italian National Institute of Statistics; ISAE, Istituto di Studi e Analisi Economica

Giovanni Ferri

LUMSA University

Date Written: January 1, 2008

Abstract

Using firm-level data for Italy, we address the employment consequences of international production offshoring.

We concur with previous literature that offshoring firms' individual employment performances are no worse than at matching non-offshoring firms. However, offshoring might impart negative spillover effects on subcontracting firms, and this indirect effect might be felt particularly in Italy's industrial structure (small-sized networked enterprises). To study this, we group firms within their typical subcontracting clusters, identify high-offshoring clusters and compare them with a matching low-offshoring sample. The evidence that employment performances worsen in the productive clusters with high-offshoring supports our conjecture.

Keywords: international outsourcing, multinational firms, employment effects, propensity score matching, difference-in-differences

JEL Classification: F23, D21

Suggested Citation

Costa, Stefano and Ferri, Giovanni, Firing at Subcontractors? Spillover Employment Effects of Offshoring in Italy (January 1, 2008). Centro Studi Luca d'Agliano Development Studies Working Paper No. 238. Available at SSRN: https://ssrn.com/abstract=1313745 or http://dx.doi.org/10.2139/ssrn.1313745

Stefano Costa (Contact Author)

ISTAT - Italian National Institute of Statistics ( email )

Via Cesare Balbo 16
00184 Rome, 0185
Italy

ISAE, Istituto di Studi e Analisi Economica ( email )

Piazza dell' Indipendenza 4
I-00185
Italy

Giovanni Ferri

LUMSA University ( email )

Via della Traspontina
Roma, Rome 00192
Italy

HOME PAGE: http://www.lumsa.it/giovanni-ferri

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