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Innovation and the geographical and organisational dimensions of outsourcing: Evidence from Italian firm-level data

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Author Info

  • Cusmano, Lucia
  • Mancusi, Maria Luisa
  • Morrison, Andrea

Abstract

The paper investigates the diversified patterns of outsourcing in the Lombardy region and relates them to the probability of introducing product and process innovation. Based on a large firm-level survey, we show that outsourcing processes are strongly regionally embedded and that offshoring is still a limited phenomenon. Outsourcing strategies are shown to be positively related to firms' innovation. In particular, the outsourcing of service activities is mostly related to product innovation, thus suggesting that firms successfully pursue core strengthening strategies. Our econometric estimates show that both geographical and organisational proximity matter. Indeed, the positive association of services with innovation is strongly related to their regional dimension, which points towards the importance of local user-producer relationships. When outsourcing crosses national borders, keeping the outsourced activities within extended organisational boundaries (i.e. within the group or network of affiliates) appears relevant, particularly with reference to R&D activities.

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Bibliographic Info

Article provided by Elsevier in its journal Structural Change and Economic Dynamics.

Volume (Year): 20 (2009)
Issue (Month): 3 (September)
Pages: 183-195

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Handle: RePEc:eee:streco:v:20:y:2009:i:3:p:183-195

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Web page: http://www.elsevier.com/locate/inca/525148

Related research

Keywords: Product innovation Process innovation Outsourcing Offshoring Italy;

References

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  1. Branzei, Oana & Vertinsky, Ilan, 2006. "Strategic pathways to product innovation capabilities in SMEs," Journal of Business Venturing, Elsevier, vol. 21(1), pages 75-105, January.
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  9. Tomiura, Eiichi, 2005. "Foreign outsourcing and firm-level characteristics: Evidence from Japanese manufacturers," Journal of the Japanese and International Economies, Elsevier, vol. 19(2), pages 255-271, June.
  10. Volker Mahnke, 2001. "The Process of Vertical Dis-Integration: An Evolutionary Perspective on Outsourcing," Journal of Management and Governance, Springer, vol. 5(3), pages 353-379, September.
  11. DeBresson, Chris & Amesse, Fernand, 1991. "Networks of innovators :A review and introduction to the issue," Research Policy, Elsevier, vol. 20(5), pages 363-379, October.
  12. Jeremy Howells, 1999. "Research and Technology Outsourcing and Innovation Systems: an Exploratory Analysis," Industry and Innovation, Taylor & Francis Journals, vol. 6(1), pages 111-129.
  13. Stefano Breschi & Francesco Lissoni, 2006. "Mobility of inventors and the geography of knowledge spillovers. New evidence on US data," KITeS Working Papers 184, KITeS, Centre for Knowledge, Internationalization and Technology Studies, Universita' Bocconi, Milano, Italy, revised Oct 2006.
  14. James H. Love & Stephen Roper, 2001. "articles: Outsourcing in the innovation process: Locational and strategic determinants," Papers in Regional Science, Springer, vol. 80(3), pages 317-336.
  15. Prencipe, Andrea, 1997. "Technological competencies and product's evolutionary dynamics a case study from the aero-engine industry," Research Policy, Elsevier, vol. 25(8), pages 1261-1276, January.
  16. Sorenson, Olav & Rivkin, Jan W. & Fleming, Lee, 2006. "Complexity, networks and knowledge flow," Research Policy, Elsevier, vol. 35(7), pages 994-1017, September.
  17. Kevin Morgan, 1997. "The Learning Region: Institutions, Innovation and Regional Renewal," Regional Studies, Taylor & Francis Journals, vol. 31(5), pages 491-503.
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Citations

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Cited by:
  1. Franco Malerba & Luigi Orsenigo, 2009. "User-producer relations, innovation and the evolution of market structures under alternative contractual regimes," KITeS Working Papers 001, KITeS, Centre for Knowledge, Internationalization and Technology Studies, Universita' Bocconi, Milano, Italy, revised Dec 2009.
  2. Baier , Elisabeth & Rammer , Christian & Schubert , Torben, 2013. "The Impact of Innovation Off-shoring on Organizational Adaptability," CIRCLE Electronic Working Papers 2013/44, Lund University, CIRCLE - Center for Innovation, Research and Competences in the Learning Economy.
  3. Carboni, Oliviero A., 2013. "Heterogeneity in R&D collaboration: An empirical investigation," Structural Change and Economic Dynamics, Elsevier, vol. 25(C), pages 48-59.
  4. Sdiri, Hanen & Ayadi, Mohamed, 2012. "Innovation et externalisation des services: une analyse empirique sur données d'entreprises tunisiennes
    [Innovation and outsourcing of services: a firm-level analysis]
    ," MPRA Paper 39359, University Library of Munich, Germany.

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