Inward FDI and Skilled Labour Force in Veneto Industrial Districts

  • Mariachiara Barzotto
  • Ilaria MariottiEmail author
Part of the Advances in Spatial Science book series (ADVSPATIAL)


Technological changes, globalisation and the increasing heterogeneity of firms populating Italian industrial districts (IDs) have deeply affected the fabric of these IDs. This chapter sheds light on the contribution of inward foreign direct investments (FDIs) to the host country’s skilled workforce, which is one of the most critical factors in IDs’ socio-economic resources. The chapter investigates whether, within the IDs, the labour workforce skills composition of affiliates of foreign multinational enterprises (MNEs) differs from that of uni-national firms. The analysis uses microdata from the Veneto NUTS-II region (Northeast Italy), as this is an economic area world-renowned for its manufacturing production and has historically been considered as a referential context for the Italian ID model. The results show that foreign affiliates of MNEs located in the Veneto IDs hire more skilled workers and more experienced workers (above 30 years old), as well as fewer foreign workers. This provides evidence of a positive impact of the presence of foreign affiliates of MNEs on the sustainability of IDs’ socio-economic fabric.


Industrial district Skills composition Propensity score matching Industrial commons Inward FDIs 



We gratefully acknowledge the support of Bruno Anastasia, Maurizio Gambuzza and Maurizio Resera of Veneto Lavoro in providing data on employment in the Veneto Region and thank them for supporting us in the data analysis. We are indebted to Marco Mutinelli for giving us access to the Reprint database and to Giancarlo Corò for his useful suggestions. The usual disclaimers apply.


  1. Andersson, U., Forsgren, M., & Holm, U. (2002). The strategic impact of external networks: Subsidiary performance and competence development in the multinational corporation. Strategic Management Journal, 23(11), 979–996.CrossRefGoogle Scholar
  2. Barba, N. G., & Venables, A. J. (2004). Multinational firms in the world economy. Princeton, NJ: Princeton University Press.Google Scholar
  3. Barbosa, N., & Louri, H. (2005). Corporate performance: Does ownership matter? A comparison of foreign- and domestic-owned firms in Greece and Portugal. Review of Industrial Organization, 27, 73–102.CrossRefGoogle Scholar
  4. Barzotto, M., Corò, G., & Volpe, M. (2016a). Territorial capital as a company intangible: Exploratory evidence from ten Italian multinational corporations. Journal of Intellectual Capital, 17(1), 148–167.CrossRefGoogle Scholar
  5. Barzotto M., Corò G., Mariotti I., & Mutinelli M. (2016b). The impact of inward FDI on host country labour markets: A counterfactual analysis on Italian manufacturing companies. c.MET – Working Papers. ISSN: 2281-5023.Google Scholar
  6. Barzotto, M., Corò, G., & Volpe, M. (2017). Sustaining industrial districts by leveraging on global and local value chains: Evidence from manufacturing multinational companies. In G. Gereffi, V. De Marchi, & E. Di Maria (Eds.), Local clusters in global value chains: Linking actors and territories through manufacturing and innovation. London: Routledge Publishing.Google Scholar
  7. Becattini, G. (1990). The Marshallian industrial district. In F. Pyke, G. Becattini, & W. Sengenberger (Eds.), Industrial districts and inter-firm cooperation in Italy (pp. 37–51). Geneva: International Institute for Labour.Google Scholar
  8. Belussi, F., & Asheim, B. T. (2010). Industrial districts and globalization: Learning and innovation in local and global production systems. In F. Belussi & A. Sammarra (Eds.), Business networks in clusters and industrial districts (pp. 246–265). London: Routledge.Google Scholar
  9. Beugelsdijk, S., McCann, P., & Mudambi, R. (2010). Place, space and organization: Economic geography and the multinational enterprise. Journal of Economic Geography, 10, 485–493.CrossRefGoogle Scholar
  10. Bronzini, R. (2007). FDI inflows, agglomeration and host country firms’ size: Evidence from Italy. Regional Studies, 41(7), 963–978.CrossRefGoogle Scholar
  11. Brouwer, A., & Mariotti, I. (2014). Firm heterogeneity in multinational and domestic firms in Italian logistics. European Transport - Trasporti Europei, 56(8), 1–17.Google Scholar
  12. Brusco, S. (1982). The Emilian model: Productive decentralisation and social integration. Cambridge Journal of Economics, 6(2), 167–184.Google Scholar
  13. Caliendo, M. (2008). Start-up subsidies in East Germany: Finally a policy that works? IZA Discussion Paper no. 3360. Bonn: Institute for the Study of Labor (IZA).Google Scholar
  14. Caliendo, M., & Kopeinig, S. (2008). Some practical guidance for the implementation of propensity score matching. Journal of Economic Surveys, 22(1), 31–72.CrossRefGoogle Scholar
  15. Cantwell, J. A., & Mudambi, R. (2005). MNE competence-creating subsidiary mandates. Strategic Management Journal, 26, 1109–1128.CrossRefGoogle Scholar
  16. Capello, R., & Lenzi, C. (2015). The knowledge–innovation nexus: Its spatially differentiated returns to innovation. Growth and Change, 46(3), 379–399.CrossRefGoogle Scholar
  17. Castellani, D., & Zanfei, A. (2006). Multinational firms, innovation and productivity. Cheltenham: Edward Elgar.CrossRefGoogle Scholar
  18. Caves, R. E. (1974). Multinational firms, competition, and productivity in host-country markets. Economica, 41, 176–193.CrossRefGoogle Scholar
  19. Crinò, R. (2010). Employment effects of service offshoring: Evidence from matched firms. Economic Letters, 107(2), 253–256.CrossRefGoogle Scholar
  20. Crinò, R., & Onida, F. (2007). Foreign ownership and economic performance in Italy: Not all is cherry-picking! CESPRI Working Paper 207. Milan: Bocconi University.Google Scholar
  21. Criscuolo, C., & Martin, R. (2004). Multinationals and US productivity leadership: Evidence from Great Britain. STI Working Paper No. 5. Paris: OECD.Google Scholar
  22. De Backer, K., & Sleuwaegen, L. (2002). Foreign ownership and productivity dynamics. Vlerick Working Papers No. 13. Leuven: Vlerick Business School.Google Scholar
  23. De Marchi, V., & Grandinetti, R. (2014). Industrial districts and the collapse of the Marshallian model: Looking at the Italian experience. Competition and Change, 18(1), 70–87.CrossRefGoogle Scholar
  24. De Marchi, V., Lee, J., & Gereffi, G. (2014). Globalization, recession and the internationalization of industrial districts: Experiences from the Italian gold jewellery industry. European Planning Studies, 22(4), 866–884.CrossRefGoogle Scholar
  25. Doms, M., & Jensen, B. (1998). Comparing wages, skills, and productivity between domestically and foreign-owned manufacturing establishments in the United States. In R. Baldwin, R. Lipsey, & J. Richardson (Eds.), Geography and ownership as bases for economic accounting, Studies in income and wealth (Vol. 59, pp. 235–255). Chicago, IL: The University of Chicago Press.Google Scholar
  26. Driffield, N., & Taylor, K. (2002). Spillovers from FDI and skill structures of host-country firms. Discussion Papers in Economics No 02/4. Leicester: Department of Economics, University of Leicester.Google Scholar
  27. Dunning, J. H. (1979). Explaining changing patterns of international production: In defence of the eclectic theory. Oxford Bulletin of Economics and Statistics, 41(4), 269–295.CrossRefGoogle Scholar
  28. Dunning, J. H. (1993). Multinational enterprises and the global economy. Wokingham: Addison-Wesley.Google Scholar
  29. Dunning, J. H. (2003). Making globalization good. Oxford: Oxford University Press.CrossRefGoogle Scholar
  30. Dunning, J. H. (2009). Location and the multinational enterprise: John Dunning’s thoughts on receiving the Journal of International Business Studies 2008 Decade Award. Journal of International Business Studies, 40(1), 20–34.CrossRefGoogle Scholar
  31. Girma, S., & Gorg, H. (2007). Evaluating the foreign ownership wage premium using a difference-in-differences matching approach. Journal of International Economics, 72, 97–112.CrossRefGoogle Scholar
  32. Glaeser, E. L., Kallal, H. D., Scheinkman, J. A., & Shleifer, A. (1992). Growth in cities. Journal of Political Economy, 100(6), 1126–1152.CrossRefGoogle Scholar
  33. Goerzen, A., Asmussen, C. G., & Nielsen, B. B. (2013). Global cities and multinational enterprise location strategy. Journal of International Business Studies, 44, 427–450.CrossRefGoogle Scholar
  34. Greenaway, D., & Kneller, R. (2007). Firm heterogeneity, exporting and foreign direct investment: A survey. The Economic Journal, 117(517), F134–F161.CrossRefGoogle Scholar
  35. Griffith, R., & Simpson, H. (2001). Characteristics of foreign-owned firms in British manufacturing. IFS Working Paper 01/10. London: Institute for Fiscal Studies.Google Scholar
  36. Hervas-Oliver, J. L., & Boix-Domenech, R. (2013). The economic geography of the meso-global spaces: Integrating multinationals and clusters at the local–global level. European Planning Studies, 21(7), 1064–1080.CrossRefGoogle Scholar
  37. Iammarino, S., & McCann, P. (2013). Multinationals and economic geography: Location, technology and innovation. Cheltenham: Edward Elgar.CrossRefGoogle Scholar
  38. Ietto-Gillies, G. (2012). Transnational corporations and international production: Concepts, theories and effects (2nd ed.). Cheltenham: Edward Elgar.Google Scholar
  39. ISTAT. (2015). 9° Censimento dell’Industria e dei Servizi e Censimento delle Istituzioni Non Profit: I Distretti Industriali 2011. Rome: ISTAT.Google Scholar
  40. Jacobs, R. L., & Hawley, J. D. (2009). The emergence of “workforce development”: Definition, conceptual boundaries and implications. In R. Maclean & D. Wilson (Eds.), International handbook of education for the changing world of work (pp. 2537–2552). Berlin: Springer.CrossRefGoogle Scholar
  41. Lipsey, R. E. (2002). Home and host country effects of FDI. NBER Working Paper 9293. Cambridge, MA: National Bureau of Economic Research.Google Scholar
  42. Mariotti, I. (2015). Transport and logistics in a globalizing world. A focus on Italy. Heidelberg: Springer.Google Scholar
  43. Mariotti, S., & Mutinelli, M. (2016). Italia Multinazionale 2016: Le Partecipazioni Italiane all’Estero ed Estere in Italia. Soveria Mannelli: Rubbettino Editore.Google Scholar
  44. Mariotti, S., Mutinelli, M., & Piscitello, L. (2008). The internationalisation of production by Italian district firms: Structural and behavioural determinants. Regional Studies, 42(5), 719–735.CrossRefGoogle Scholar
  45. Mariotti, S., Piscitello, L., & Elia, S. (2014). Local externalities and ownership choices in foreign acquisitions by multinational enterprises. Economic Geography, 90(2), 187–211.CrossRefGoogle Scholar
  46. Marshall, A. (1890). Principles of economics: An introductory volume. London: Macmillan.Google Scholar
  47. Mayer, T., & Ottaviano, G. I. P. (2007). The happy few: The internationalisation of European firms – new facts based on firm-level evidence. European firms & international markets (EFIM). Brussels: Bruegel Blueprint Series.Google Scholar
  48. McCann, P., & Mudambi, R. (2005). Analytical differences in economic geography: The case of multinational firms. Environment and Planning A, 37(10), 1875–1876.CrossRefGoogle Scholar
  49. Moretti, E. (2012). The new geography of jobs. New York, NY: Houghton Mifflin Harcourt.Google Scholar
  50. Morrison, A. (2008). Gatekeepers of knowledge within industrial districts: Who they are, how they interact. Regional Studies, 42(6), 817–835.CrossRefGoogle Scholar
  51. Nachum, L. (2003). Liability of foreignness in global competition? Financial service affiliates in the City of London. Strategic Management Journal, 24(12), 1187–1208.CrossRefGoogle Scholar
  52. OECD. (2008). Do multinationals promote better pay and working conditions? OECD Employment Outlook. Paris: OECD.Google Scholar
  53. Pavitt, K. (1984). Sectoral patterns of technical change: Towards a taxonomy and a theory. Research Policy, 13, 343–373.CrossRefGoogle Scholar
  54. Piore, M. J., & Sabel, C. F. (1984). The second industrial divide: Possibilities for prosperity. New York, NY: Basic Books.Google Scholar
  55. Pisano, G. P., & Shih, W. C. (2009). Restoring American competitiveness. Harvard Business Review, 87(7-8), 114–125.Google Scholar
  56. Pisano, G. P., & Shih, W. C. (2012). Producing prosperity: Why America needs a manufacturing renaissance. Boston, MA: Harvard Business School Press.Google Scholar
  57. Saxenian, A. (1994). Regional advantage: Culture and competition in Silicon Valley and Route 128. Cambridge, MA: Harvard University Press.Google Scholar
  58. Schmitz, J. A. (2005). What determines productivity? Lessons from the dramatic recovery of the US and Canadian iron ore industries following their early 1980s crisis. Journal of Political Economy, 113(3), 582–625.CrossRefGoogle Scholar
  59. Sedita, S., Caloffi, A., & Belussi, F. (2013). Heterogeneity of MNEs entry modes in industrial clusters: An evolutionary approach based on the cluster life cycle model. DRUID Society Conference 2013, Barcelona, Spain.Google Scholar
  60. Zanfei, A. (2000). L’impatto delle multinazionali sui paesi ospiti: Il problema della creazione dei legami a monte e a valle con le economie locali. Economie a Politica Industriale, 105, 133–160.Google Scholar

Copyright information

© Springer International Publishing AG, part of Springer Nature 2018

Authors and Affiliations

  1. 1.Essex Business SchoolUniversity of EssexColchesterUK
  2. 2.DAStU-Politecnico di MilanoMilanItaly

Personalised recommendations