A Tale of Two Bazaar Economies: An Input-Output Analysis for Germany and Italy
Abstract
This paper evaluates the extent of production internationalisation in Italy and Germany between 1995 and 2007. The analysis is based on a broad set of international outsourcing indicators to which we have added a new indicator to take account also of the import content of domestic inputs: the direct and indirect import content of production. In 2007, both countries showed a similar intensity of international off-shoring, although Italian manufacturing firms showed a slightly higher rate. From a dynamic viewpoint, both economies spurred substantial growth in off-shoring in 1995-2000, although the growth was stronger in Germany, where at least manufacturing started from a lower level. In 2001-2003, off-shoring levels stagnated in both economies, although growth quickly resumed in 2004-2007, suggesting a shift in the strategic direction and the reorganization of production by Italian firms. The new challenges posed by globalization, the widespread take-up of information and communication technologies, and the adoption of the euro have induced the most dynamic Italian firms to rethink their organizational set-up, including the degree of vertical specialisation.
Domains
Economics and FinanceOrigin | Explicit agreement for this submission |
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