Production to Order and Performance in Domestic and Foreign Markets
AbstractThis paper contributes to the literature on firms' productivity and exporting decisions by analyzing the role played by organizational choice aspects. Rather than setting up a vertically integrated structure, manufacturers may act as sub-contractors in both domestic and foreign markets, and produce to satisfy the requirements of other firms. The predictions that the most productive firms self-select into exporting, while the least productive ones work as sub-contractors serving the domestic market only are tested on a sample of Italian firms observed in the 1998-2003 period. The results of our estimates highlight a ranking of firms consistent with the prediction of a "stylized" theoretical model, and provide a clear indication that firms using sub-contracting in foreign markets display lower TFP values as compared to "direct exporters".
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Bibliographic InfoArticle provided by Società editrice il Mulino in its journal L'industria.
Volume (Year): (2009)
Issue (Month): 3 ()
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Export; Sub-contracting; Production to Order; Total Factor Productivity;
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- Accetturo Antonio & Giunta Anna & Rossi Salvatore, 2011.
"The Italian Firms between Crisis and the new Globalization,"
Società editrice il Mulino, issue 1, pages 145-164.
- Antonio Accetturo & Anna Giunta & Salvatore Rossi, 2011. "The Italian firms between crisis and the new globalization," Questioni di Economia e Finanza (Occasional Papers) 86, Bank of Italy, Economic Research and International Relations Area.
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