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Issue Q2 2015  
Is labor flexibility a substitute to offshoring? Evidence from Italian manufacturing  
Andrea F. Presbitero
Matteo G. Richiardi
Alessia A. Amighini
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. Abstract

Offshoring ; Labor flexibility ; Temporary work ; Delocalization ; Labor market reforms ; Keywords
J21 ; F16 ; F23 ; JEL classification
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