2023/15 | LEM Working Paper Series | ||||||||||||||||
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Italy and the trap of GVC downgrading: labour dependence in the European geography of production |
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Lorenzo Cresti, Giovanni Dosi, Federico Riccio and Maria Enrica Virgillito |
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Keywords | |||||||||||||||||
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Input-output; global value chains; international division of labour; core-periphery.
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JEL Classifications | |||||||||||||||||
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F66, F15, J21, O14, O52
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Abstract | |||||||||||||||||
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How does Italy position inside the European structure of trade relationships? How labour
bilateral flows have changed over time? Which type of employment activity has been outsourced?
Which insourced? Focusing on a three-country perspective, what are the employment bilateral
relationships between Italy-Germany-Poland (descending periphery-core-ascending periphery)?
To address these questions we develop a novel set of bilateral labour dependence indicators
inside I-O production networks. Overall, we provide evidence of the reconfiguration of Italy
as falling into the trap of GVC downgrading, with an increasing number of trade relationships
in employment requirements, particularly in the most strategic productions, as insourced from
abroad. The offshoring strategy conducted so far has resulted in a weakening of its internal
production capacity and employment absorption, even more harshly when compared to other
European countries.
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