Offshoring and Immigrant Employment: Firm-level Theory and Evidence

Giuseppe Bertola, Giorgio Barba Navaretti () and Alessandro Sembenelli

No 6743, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: We propose and solve a simple model of firm-level decisions to offshore production stages of lower skill intensity than that of activities that remain in the domestic location. In theory, offshoring is optimal only for the more productive among heterogeneous firms if it entails a fixed cost. In a large sample of Italian firms, offshoring - especially of intermediate production stages - is indeed more prevalent among firms that are larger and more productive, and is predicted by arguably relevant firm-level characteristics. We also document that offshoring decreases the share of unskilled employment in domestic production facilities as well as firms? propensity to employ immigrant workers, and we discuss the possible determinants and policy implication of the latter finding.

Keywords: Outsourcing; Migration; Foreign direct investment; Skilled labour (search for similar items in EconPapers)
JEL-codes: F2 J61 (search for similar items in EconPapers)
Date: 2008-03
New Economics Papers: this item is included in nep-bec, nep-lab and nep-mig
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (11)

Downloads: (external link)
https://cepr.org/publications/DP6743 (application/pdf)
CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at subscribers@cepr.org

Related works:
Working Paper: Offshoring and Immigrant Employment: Firm-level Theory and Evidence (2008)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cpr:ceprdp:6743

Ordering information: This working paper can be ordered from
https://cepr.org/publications/DP6743

Access Statistics for this paper

More papers in CEPR Discussion Papers from C.E.P.R. Discussion Papers Centre for Economic Policy Research, 33 Great Sutton Street, London EC1V 0DX.
Bibliographic data for series maintained by ().