Subcontracting in the Italian industry. Labour Division, Firms’ Growth and North-South Divide
AbstractBy making use of a 4000 firms database, this paper analyzes the dynamics of division of labour among Italian manufacturing firms during the '90s, and seeks to assess the impact that subcontracting has on manufacturing firms' growth. In particular, we investigate the relationship between labour division and firms' growth with three specific objectives: a) to understand whether and how subcontracting may have affected firms' growth dynamics; b) to test if larger growth could be due to stronger incentives to innovate for subcontracting firms and c) to study the joint influence of subcontracting and location in Southern Italy on growth. The main results are that i) the propensity to carry out subcontracting activities is relevant for growth, especially when allowing for a nonlinear relationship between growth and subcontracting; ii) more innovative subcontracting firms are also more susceptible to grow and iii) the deep dualism of the Italian industrial structure is once again confirmed, as Southern subcontractors show poorer performances and slower growth.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 13084.
Date of creation: 19 Jan 2009
Date of revision:
subcontracting; growth; location;
Find related papers by JEL classification:
- D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
- L23 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Organization of Production
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