The Euro and Firm Restructuring
Government of the Italian Republic (Italy), Ministry of Economy and Finance, Department of the Treasury Working Paper No. 10
53 Pages Posted: 2 Aug 2010
There are 4 versions of this paper
The Euro and Firm Restructuring
The Euro and Firm Restructuring
The Euro and Firm Restructuring
The Euro and Firm Restructuring
Date Written: January 11, 2010
Abstract
We test whether and how the adoption of the euro, narrowly defined as the end of competitive devaluations, has affected member states’ productive structures, distinguishing between within and across sector reallocation. We find evidence that the euro has been accompanied by a reallocation of activity within rather than across sectors. Since its adoption, productivity growth has been relatively stronger in country-sectors that once relied more on competitive devaluations to regain price competitiveness. This effect is robust to potential omitted-variable bias and correlated effects. Firm-level evidence from Italian manufacturing confirms that low-tech businesses, which arguably benefitted most from devaluations, have been restructuring more since the adoption of the euro. Restructuring has entailed a shift of business focus from production to upstream and downstream activities, such as product design, advertising, marketing and distribution, and a corresponding reduction in the share of blue collar workers.
Keywords: Euro, Devaluations, Productivity Growth, Firm Restructuring, Skill Intensity
JEL Classification: F33, J24, L16, O47
Suggested Citation: Suggested Citation
Do you have a job opening that you would like to promote on SSRN?
Paper statistics
Recommended Papers
-
The Euro and Firm Restructuring
By Matteo Bugamelli, Fabiano Schivardi, ...
-
The Euro and Firm Restructuring
By Matteo Bugamelli, Fabiano Schivardi, ...
-
The Euro and Firm Restructuring
By Matteo Bugamelli, Fabiano Schivardi, ...
-
The Pro-Competitive Effect of Imports from China: An Analysis of Firm-Level Price Data
By Matteo Bugamelli, Silvia Fabiani, ...
-
The Euro and Structural Reforms
By Alberto F. Alesina, Silvia Ardagna, ...
-
The Euro and Structural Reforms*
By Alberto F. Alesina, Silvia Ardagna, ...
-
A New Indicator of Competitiveness for Italy and the Main Industrial and Emerging Countries
By Andrea Finicelli, Alessandra Liccardi, ...
-
By Ansgar Hubertus Belke, Bernhard Herz, ...
-
The Politics of Monetary Policy
By Alberto F. Alesina and Andrea Stella