Roberto Antonietti

The impact of production offshoring on the skill composition of manufacturing firms: evidence from Italy

In this work we explore how the international outsourcing of production impacts the skill composition of employment within Italian manufacturing firms. In particular, our aim is to assess whether the choice to offshore production activities to cheap‐labour countries implies a bias in the employment of skilled workers relative to unskilled ones. Using a balanced panel of firms covering the period 1995–2003, we set up a counterfactual analysis in which, by using a difference‐in‐differences propensity score matching estimator, we compare the dynamics of skill demand for treated and control firms while addressing the possible problem of selection bias. Our results identify a ‘potential’ skill bias effect of production offshoring. In particular, we find that treated firms tend to show an upward shift in the skill ratio with respect to the counterfactual sample, but coefficients are not significantly different from zero. When we look at the elements of the skill ratio separately, we find that the skill bias is driven by a fall in the employment of production workers (blue collars), rather than by the increase in the employment of non‐production workers (white collars), thus providing further evidence on the unskilled labour‐saving nature of international outsourcing.

Spatial Agglomeration, Production Technology and the Choice to Make and/or Buy: Empirical Evidence from the Emilia Romagna Machine Tool Industry

Antonietti R., Ferrante M. R. and Leoncini R. Spatial agglomeration, production technology and the choice to make and/or buy: empirical evidence from the Emilia Romagna machine tool industry, Regional Studies. Using a new firm-level dataset, the decision, and relative intensity, to source either fully or partially production activities by small mechanical firms in the Emilia Romagna region of Italy is analysed. A hurdle negative binomial model is estimated, controlling for endogeneity and composition of the production process. Full outsourcing is positively related to the share of skilled personnel, the presence abroad and the employment density in neighbouring firms. Concurrent sourcing is affected by firm size, age and labour cost. The insensitivity of concurrent outsourcing to the industrys spatial concentration reflects the lower transaction costs compared with full outsourcing.

Opening the "Skill-Biased Technological Change" Black Box: A Look at the Microfoundations of the Technology-Skill Relationship

The present article is a review of the recent empirical literature developed around the issues of why technology is complementary to high levels - and substitute for low levels - of skill, and, in particular, of how the adoption of ICT and computer-based machines has changed the skill requirements of jobs. During the last two decades the discussion around the impact of technological diffusion on the skill mix of employees has been intense. On this purpose, different approaches have developed that provide different evidence to a common research question. The paper shows that traditional studies have just inferred the skill-biased technical change hypothesis by employing broad measures of technological change and human skills from sector- and firm-level data. While studies that rely on worker-level data depict a more puzzling phenomenon, a recent literature based on job-level analyses focuses the heterogeneity of both technology and skills and aims at determining the demand for labor by the tasks that occupations require. The main conclusion is that technology is a partial substitute for repetitive manual tasks, and a complement of nonroutine, non-manual skills, for which more educated workers enjoy a comparative advantage. However, some open questions still remain that claim a deeper and multidisciplinary investigation on the endogenous relationship between technology adoption and general versus specific skill accumulation.

Green investment strategies and export performance: A firm-level investigation

In this paper we empirically investigate the relationship between investments in environmentally-oriented equipment and firms’ export performance. Drawing on Porter hypothesis and firm heterogeneity theory, we adopt a structural model where first we estimate the impact of green investment strategies on the level of productive efficiency (TFP), and second we assess whether induced productivity influences the extensive and intensive margin of exports. Relying on a rich firm-level dataset on Italian manufacturing, our results show that firms with higher productivity, induced among other factors by green investment involving environmental protection and reduction in the use of raw materials, have increased commitment to, and profits from, exports, especially towards countries adopting a more stringent environmental regulatory framework. Our evidence provides a ‘green investment-based’ explanation for the link between TFP-heterogeneity and trade.

Production Outsourcing, Organizational Governance and Firm’s Technological Performance: Evidence from Italy

Aim of this paper is to study whether and how the firm’s decision to outsource production activities affects its technological performance. In particular, we look at how the alignment between the firm’s governance strategy and the underlying attributes of the transactions affects the capacity of the firm to introduce new products and processes. Using microeconomic data on a repeated cross-section of Italian manufacturing firms for the period 1998-2003, we develop a two-stage approach: first, we estimate the determinants of the firm’s organizational governance (production outsourcing); second, we incorporate a measure of governance misalignment into a technological performance relation. We find (i) that firms not aligned with the optimal organizational governance perform less well in terms of process innovation than more aligned competitors, but (ii) that misalignment has a positive effect on product innovation. However, this counterintuitive result is strongly characterized by non-linear effects that reverse the latter correlation for high values of governance misfit.

Inward Foreign Direct Investment and Innovation: Evidence from Italian Provinces

This paper investigates empirically whether inward greenfield foreign direct investment (FDI) is related to greater sectorial innovation in the host Italian provinces. We combine several sources of data to estimate panel count models, regressing the annual number of patents in each province and industry against a series of lagged FDI variables. Our results show that a positive relationship between FDI and local patenting emerges only for services. In particular, we find that greater inward FDI in services positively influences local patenting activity in knowledge-intensive business services. These results are robust to endogeneity and the inclusion of province controls and fixed effects.

Human Capital, Sport Performance, and Salary Determination of Professional Athletes

Thanks to the high availability of data, professional sport represents a unique laboratory in order to test labour market theories and predictions. In particular, one of the most important propositions concerns the role that human capital plays in shaping the life-cycle earnings patterns of workers. To the extent that sport can be considered as a type of human capital investment, human capital theory can help to understand, and empirically assess, how the professional sports labour market rewards performance attributes of players. On this purpose, this piece of work reviews the most important economic contributions focused on the wage determination of professional athletes with the aim of outlining both the emerging common features and the main issues. In so doing, a distinction between professional team-sports and professional single-player sports is done, where the former is represented by the most popular sports in North America and Europe, such as baseball, basketball, hockey and soccer, whereas the latter is primarily represented by professional golf in the US.

From Outsourcing to Productivity, Passing Through Training: Microeconometric Evidence from Italy

The aim of this paper is to provide firm-level evidence on the short-run link between outsourcing and labor productivity using an original dataset of Italian manufacturing firms, and applying a two-stage probit least squares estimator. We find a positive effect on productivity from outsourcing only if firms provide training for the workforce. This indirect impact on productivity is independent of the type of activity outsourced and is bigger in the case of service outsourcing. This can be explained by the different feedback effect of labor productivity on training and by the different type of training provided. While production outsourcing induces an organizational change which stimulates off-the-job training for plant operators, service outsourcing induces firms to train a broader range of occupational profiles - both off and on the job. Similar results emerge for the case of joint outsourcing of both production and service activities. Therefore, we find that outsourcing generates positive productivity effects only if it is part of a broader knowledge management strategy that involves upgrading of workers’ skills.

Urban Density and Vertical Disintegration: The Case of Service Firms in Milan

A quite recent strand of the economics literature has emphasized the role of services, and in particular of knowledge-intensive business services (KIBS), as a primary source of knowledge creation and diffusion, since they are typically transferred among firms through strong supplier—user interactions (Miles et al., 1995; Muller and Zenker, 2001; Strambach, 2001; Muller and Doloreux, 2009).

KIBS and the City: GIS Evidence from Milan

In this paper we assess the existence, and the magnitude, of agglomeration economies affecting the KIBS industry located in the city of Milan. By exploiting a rich firm-level dataset, we calculate distance-based measures of spatial agglomeration, in which we distinguish between own-industry, other-industry and related-industry neighbouring firms. Our OLS estimates show that TFP is positively affected by proximity to own-industry and related-industry firms, whereas it decreases with proximity to other-industry firms. We also observe that localization economies are strong at low distances, and rapidly decay over space. Differently, related variety effects materialize after one kilometre, but are more persistent over distance.Our quantile regressions show that these results depend also on the position of the firm over the TFP distribution. In particular, when looking at KIBS with the lowest performance, we find that only localization economies are at work, and on a very limited geographical scale. Differently, top-performance KIBS benefit from proximity to technologically-related firms, and across a wider spatial scale.