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Is labor flexibility a substitute to offshoring? Evidence from Italian manufacturing

Andrea Presbitero, Matteo Richiardi () and Alessia Amighini ()

International Economics, 2015, issue 142, 81-93

Abstract: We test whether labor flexibility acts as a substitute to delocalization. Using Italian survey data, we show that a higher share of temporary workers appears to reduce the likelihood of future offshoring. However, once reverse causality and spurious correlation are controlled for with IV techniques, the relationship vanishes. This finding suggests that a solid argument that labor flexibility and offshoring are substitutes has still to be made.

Keywords: Offshoring; Labor flexibility; Temporary work; Delocalization; Labor market reforms (search for similar items in EconPapers)
JEL-codes: J21 F16 F23 (search for similar items in EconPapers)
Date: 2015
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Related works:
Working Paper: Is labor flexibility a substitute to offshoring? Evidence from Italian manafacturing (2012) Downloads
Working Paper: Is labor flexibility a substitute to offshoring? Evidence from Italian manafacturing (2012) Downloads
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