International Offshoring, Local Effects: an Inquiry on Italian Firms

Abstract

Does offshoring affect industrial productivity at local level? In order to reply to this question a set of equation have been estimated on a panel of Italian provinces in the period 1999-2010, using DOLS (Dynamic Ordinary Least Square) methodology for panel data. The main results of the empirical analysis are: 1) offshoring has not damaged manufacturing employment: 2) offshoring has increased employment in services. The proposed explanation is that offshoring is associated with productivity growth, an indirect proof that the process was not pursued simply as a cost-reduction seeking strategy. However short and long run effects may differ, and data shows that the process is still in its initial stag