Purpose
The purpose of this paper is to assess whether offshoring strategies are able to substantially enhance firms’ international competitiveness in terms of productivity, innovativeness and skill composition for a panel of Italian manufacturing firms.
Design/methodology/approach
A set of hypotheses derived from the extant literature is tested on data from balance sheets and qualitative surveys of about 4,000 Italian firms. The methodology used is a propensity score matching estimator and difference in differences method that allowed the authors to detect the causal effect of the offshoring status of the firms on some performance measures.
Findings
Results demonstrate that offshoring increases the propensity to innovate and the skill ratio of workers but does not show a significant association with productivity growth. The estimates are robust in all the specifications.
Research limitations/implications
The results are applicable to Italian firms. The magnitude and timing of the effects may vary across firms and countries.
Originality/value
This paper contributes to the empirical literature on offshoring by exploring its impact on a variety of firms’ performance measures by using matching techniques that allow us to investigate more in depth the causality link of the relationship and to control for the self-selection effect (more productive firms self-select to offshore).
In this paper we investigate the long-run e¡ects of government spending and taxation in an endogenous growth setting. The model is a variant of Barro's model (`Government Expenditure in a Simple which human capital accumulation is driven by government spending on public education. To balance the budget the government levies a tax on output in two alternative speci¢cations of the human capital accumulation equation. The results consolidate some recent ¢ndings that taxation, when it is used for productive purposes, may lead to faster growth. Growth rates increase with taxes up to a level around 60^70 per cent.
This paper reviews one of the crucial issues in the recent growth literature concerning the hypothesis of cross country convergence of levels and growth rates of income per capita implied by the neo‐classical growth model, both in the Solow‐Swan and Rampsey‐Cass‐Koopmans versions. The alternative endogenous growth models, consistent with permanent income inequality, are considered. Convergence to a common income level versus divergence is discussed from a theoretical point of view. Then, empirical tests of the convergence property are presented. What emerges is that Barro type regressions and their findings about “conditional” convergence are questionable and cannot be used to give a definitive response on this issue.
This paper investigates the finance–growth nexus in Italy over a period of more than forty years (1965–2009). After a review of the theoretical and empirical literature, the paper provides evidence that the aggregate indicators of financial depth, constructed by Beck et al. () and widely used in the literature, played no significant role in spurring economic growth, after controlling for the main determinants of growth and corrected for endogeneity biases. The indicator of private credit to GDP—considered the most important measure of financial development—adversely affected growth in the period studied. By contrast, financial development indicators have a positive impact when are associated directly with the real investment rate. The results are robust to the inclusion of various controls and changes in the conditioning set.
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