Importing Jobs or Exporting Firms? A Close Look at the Labour Market Implications of Italy's Trade and Foreign Direct Investment Flows

CEPR Discussion Paper Series Number 2033

Posted: 30 Mar 1999  

Alessandro Turrini

European Commission; Centre for Economic Policy Research (CEPR)

Rodolfo Helg

Cattaneo University - LIUC ; CESPRI / KITeS Bocconi University

Marzio Galeotti

University of Milan - Department of Economics, Management and Quantitative Methods (DEMM); Bocconi University - IEFE Centre for Research on Energy and Environmental Economics and Policy

Riccardo Faini

Deceased

Anna M. Falzoni

Universita di Bergamo

Date Written: December 1998

Abstract

International economic integration is often blamed for the deteriorating fortunes of unskilled workers in industrial countries. We look at the labour 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 labour 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 labour 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.

JEL Classification: F16, F23

Suggested Citation

Turrini, Alessandro and Helg, Rodolfo and Galeotti, Marzio and Faini, Riccardo and Falzoni, Anna M., Importing Jobs or Exporting Firms? A Close Look at the Labour Market Implications of Italy's Trade and Foreign Direct Investment Flows (December 1998). CEPR Discussion Paper Series Number 2033. Available at SSRN: https://ssrn.com/abstract=142808

Alessandro Turrini (Contact Author)

European Commission ( email )

Office BU-10/113
B-1049 Brussels
Belgium
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+32 2 299 3505 (Fax)

Centre for Economic Policy Research (CEPR)

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Rodolfo Helg

Cattaneo University - LIUC ( email )

Institute of Economics
corso Matteotti 22
Castellanza (VA), 21053
Italy
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+39 0331 572229 (Fax)

CESPRI / KITeS Bocconi University ( email )

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Milan, MI 20136
Italy
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Marzio Galeotti

University of Milan - Department of Economics, Management and Quantitative Methods (DEMM) ( email )

7 via Conservatorio
I-20122 Milano
Italy
+39-2-50321534 (Phone)
+39-2-50321505 (Fax)

Bocconi University - IEFE Centre for Research on Energy and Environmental Economics and Policy ( email )

via Rontgen
Milan, 20123
Italy
+39-2-58362340 (Phone)

HOME PAGE: http://www.iefe.unibocconi.it

Anna M. Falzoni

Universita di Bergamo ( email )

Via Salvecchio, 19
Bergamo, 24129
Italy

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