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Core-Periphery Perspective: A New Line of Research

How often do firms in affluent countries on the fringes of the global economy, or peripheral economies, hire inventors from those countries that hold most power in global economic relations, or core economies?

Using Italy as a case study of a peripheral economy, Ram Mudambi compares how often foreign companies are hiring Italian inventors—what Mudambi terms “reaching in”—versus how often Italian companies are hiring foreign inventors, or “reaching out.”

For Italy, the vast majority of economic relationships are classified as “reaching in.” Only 25% of Italian companies chose to hire abroad, or reach out, indicating that firms based in core economies are more likely to hire inventors from peripheral economies than vice-versa.