MIGRATION AND THE STRUCTURE OF MANUFACTURING PRODUCTION. A VIEW FROM ITALIAN PROVINCES
Elizabeth Casabianca (),
Alessia Lo Turco () and
Daniela Maggioni ()
Authors registered in the RePEc Author Service: Edoardo Gaffeo and
No 448, Working Papers from Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali
What is the impact of immigration on the product mix of the receiving economy? To answer this question we exploit variation in the presence of immigrants across Italian provinces within the period 2003-2011. We find that immigration changes the manufacturing output composition of Italian provinces in favour of less capital intensive products, without affecting the total amount of manufacturing production. This result is based on a 2SLS strategy resting on the settlement of immigrants in the pre-sample period and is in line with the predictions of standard trade models concerning the role of factor growth on product specialisation. More specifically, immigrants sustain and deepen Italy's revealed comparative advantages in labour intensive goods. We thus add to the existing studies finding within-industry adjustments of factor usage in production rather than between-industry output adjustments in response to immigration flows. When searching for the underlying mechanisms driving our result, we discover that a larger share of immigrants promotes the local reshoring of labour intensive productions and fosters the creation of new firms in labour intensive industries.
Keywords: Keywords: Immigration; Local production structure; Capital intensity (search for similar items in EconPapers)
JEL-codes: F22 J61 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cmp, nep-fdg and nep-mac
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Persistent link: https://EconPapers.repec.org/RePEc:anc:wpaper:448
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