Deindustrialization: what future for industry in France?

Summary France is among the countries most affected and threatened by deindustrialization. Economic indicators show significant changes in the economic structure of the French economy for many years. The decrease in French industrial employment is undeniable. The manufacturing industry has experienced a sharp decline in the number of employees since 1974 (2,380,967 jobs lost) and a decline in its share of overall value added (11.38% in 2016 compared to 22.4% in 1970). For these reasons, the objective of this thesis is to determine the explanatory factors of this phenomenon, to study the role of innovation in French deindustrialization, and to examine the real and net impact of offshoring on the decline in manufacturing employment.The determinants of deindustrialization in French manufacturing are analyzed using panel data in two subperiods (pre-crisis and post-crisis).Our sample is composed of 9,364 firms observed over the period 2000-2015. The results of both estimations (pre-crisis and post-crisis) confirm a negative impact of labor costs, productivity, export rates, firm size and age on manufacturing employment. The subcontracting rate was insignificant before the crisis and therefore did not explain the variation in employment in our model.however, after the crisis this variable became highly significant (1%) and negatively correlated with the variation in employment.In a second study, the estimation of a CDM model shows that product innovation has a positive and significant impact on industrial employment. However, process innovation seems to have a negative impact on the evolution of employment. In the last part of the thesis, the propensity score matching estimator is applied to measure the real net impact of offshoring on employment decline and to determine the characteristics of the most offshoring firms from a sample of 2270 firms belonging to the manufacturing industry. The results of this estimation show that offshoring contributes more to the decline in industrial employment after the 2008 crisis. Between 2002 and 2007, the net impact of offshoring on employment was an average of 18 jobs lost per firm. In contrast, this impact became much greater in the second period (2008-2014) with an average of 30 jobs lost per company, representing an increase of nearly 67% in the contribution of offshoring to the loss of industrial jobs within companies. The companies that relocate the most are: exporters, older, large, innovative, they belong more often to the automotive and capital goods sectors, they have R&D activities in cooperation with European, Indian or Chinese entities.Regarding the motivations for relocation, the companies that relocate the most are those who are looking for relatively lower wages, more advantageous taxation and regulation, to get closer to dynamic and growing markets....