Do Italian Firms Improve Their Performance at Home by Investing Abroad?
Do Italian Firms Improve Their Performance at Home by Investing Abroad?
In this chapter tackles the existing debate on how the transfer of economic activities abroad, through either foreign investment or through arm-length contracts, affects a home country. It assesses manufacturing firms in Italy and their home activities, studying how they are able to change after the setting up of foreign subsidiaries abroad. It compares the debate on outsourcing in the United States and that of continental Europe, where European countries show more concern towards loss of jobs rather than services. The chapter overall focuses on foreign direct investment and how the effects of outsourcing can be viewed through this lens. What is found is that against the common notion about international outsourcing, it is shown to significantly boost performance at home.
Keywords: foreign investment, arm-length contracts, manufacturing firms, Italy, outsourcing, foreign direct investment, international outsourcing
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