The impact of inward FDIs on labour composition. Evidence from Italy The fast pace of globalisation has reshaped not only the global scaling on trade, but also the organisation of economic activity and, accordingly, the division of labour. The presence and activities of inward FDIs in the host countries may stem potential benefits, this is the reason why countries are increasingly competing to attract inward FDIs. Besides, in advances economies a specialised, skilled workforce emerges to be one a pivotal economic development asset to enhance local and regional innovation capabilities. Nevertheless, the offshoring processes have led manufacturing MNEs in advanced economies to shrink their ‘industrial commons’ necessary to support manufacturing. The literature on the host country has widely documented a superior performance of foreign multinational enterprises (henceforth, FMNEs). Besides, FMNEs might generate spillover through several interaction mechanisms, both intra-industry, and inter-industry. Yet, there is still scant evidence about the direct and indirect effects of inward FDI on the high-income countries’ industrial base being the former the effects at the level of inward FDI, while the latter the company’s supply chain and the broader business environment in which it operates. Specifically, the literature has overlooked the impact on the labour market composition/human capital endowment, which is crucial for enhancing competitiveness of a territory. The present paper aims to fill this gap by investigating the overall impact of inward FDIs on the host country employment and skill composition, by allowing for both direct and indirect effects. The unit of analysis is the “NUTS3 province – manufacturing sub-sector”, i.e., each ensemble of firms operating in the same industrial macro-sector, constituted by interdependent sectors belonging to the same industrial filiére—and localised in the same geographical province. The fundamental hypothesis is that the main impact is sectorally and spatially circumscribed within the “provincial-industry” in which the firm operates and carries out the most of its external relations. This issue is empirically investigated with reference to the Italian case in the period 2007-2011. A novel database merging economic data on inward FDIs, operating in the manufacturing sectors, with data on the Italian provinces is adopted, and descriptive statistics and econometric analysis have been developed, devoting particular attention to the firms’ skill composition.
THE IMPACT OF INWARD FDIS ON LABOUR COMPOSITION. EVIDENCE FROM ITALY
Ilaria Mariotti;Marco Alberto Mutinelli
2016-01-01
Abstract
The impact of inward FDIs on labour composition. Evidence from Italy The fast pace of globalisation has reshaped not only the global scaling on trade, but also the organisation of economic activity and, accordingly, the division of labour. The presence and activities of inward FDIs in the host countries may stem potential benefits, this is the reason why countries are increasingly competing to attract inward FDIs. Besides, in advances economies a specialised, skilled workforce emerges to be one a pivotal economic development asset to enhance local and regional innovation capabilities. Nevertheless, the offshoring processes have led manufacturing MNEs in advanced economies to shrink their ‘industrial commons’ necessary to support manufacturing. The literature on the host country has widely documented a superior performance of foreign multinational enterprises (henceforth, FMNEs). Besides, FMNEs might generate spillover through several interaction mechanisms, both intra-industry, and inter-industry. Yet, there is still scant evidence about the direct and indirect effects of inward FDI on the high-income countries’ industrial base being the former the effects at the level of inward FDI, while the latter the company’s supply chain and the broader business environment in which it operates. Specifically, the literature has overlooked the impact on the labour market composition/human capital endowment, which is crucial for enhancing competitiveness of a territory. The present paper aims to fill this gap by investigating the overall impact of inward FDIs on the host country employment and skill composition, by allowing for both direct and indirect effects. The unit of analysis is the “NUTS3 province – manufacturing sub-sector”, i.e., each ensemble of firms operating in the same industrial macro-sector, constituted by interdependent sectors belonging to the same industrial filiére—and localised in the same geographical province. The fundamental hypothesis is that the main impact is sectorally and spatially circumscribed within the “provincial-industry” in which the firm operates and carries out the most of its external relations. This issue is empirically investigated with reference to the Italian case in the period 2007-2011. A novel database merging economic data on inward FDIs, operating in the manufacturing sectors, with data on the Italian provinces is adopted, and descriptive statistics and econometric analysis have been developed, devoting particular attention to the firms’ skill composition.I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.
