IDEAS home Printed from https://ideas.repec.org/a/bla/growch/v46y2015i2p292-320.html
   My bibliography  Save this article

Outsourcing and Firm Productivity in a Specific Local Production System: Evidence from Reggio Emilia (Italy)

Author

Listed:
  • Davide Antonioli
  • Massimiliano Mazzanti
  • Sandro Montresor
  • Paolo Pini

Abstract

This paper investigates the impact of outsourcing on the labor productivity of firms in a specific local production system. A number of hypotheses about the location-specific effects of outsourcing are put forward and tested on a sample of firms in the province of Reggio Emilia (within the Emilia-Romagna region, in North-East Italy). The relationship between outsourcing and productivity turns out positive only if considering the externalization of high value-added activities. On the contrary, it is negative in the case of low value-added activities. This occurs to a greater extent for firms in mature industrial districts, whose socio-economic conditions however do not arrive to magnify the productivity premium of externalizing high value-added ones. The technological innovativeness of the firms instead helps with that, pointing to a developmental use of outsourcing in the area.

Suggested Citation

  • Davide Antonioli & Massimiliano Mazzanti & Sandro Montresor & Paolo Pini, 2015. "Outsourcing and Firm Productivity in a Specific Local Production System: Evidence from Reggio Emilia (Italy)," Growth and Change, Wiley Blackwell, vol. 46(2), pages 292-320, June.
  • Handle: RePEc:bla:growch:v:46:y:2015:i:2:p:292-320
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1111/grow.12070
    Download Restriction: Access to full text is restricted to subscribers.

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Holl, Adelheid, 2008. "Production subcontracting and location," Regional Science and Urban Economics, Elsevier, vol. 38(3), pages 299-309, May.
    2. Catherine J. Morrison Paul & Mahmut Yasar, 2009. "Outsourcing, productivity, and input composition at the plant level," Canadian Journal of Economics, Canadian Economics Association, vol. 42(2), pages 422-439, May.
    3. Crepon, B. & Duguet, E. & Mairesse, J., 1998. "Research Investment, Innovation and Productivity: An Econometric Analysis at the Firm Level," Papiers d'Economie Mathématique et Applications 98.15, Université Panthéon-Sorbonne (Paris 1).
    4. Holger Görg & Aoife Hanley & Eric Strobl, 2008. "Productivity effects of international outsourcing: evidence from plant-level data," Canadian Journal of Economics, Canadian Economics Association, vol. 41(2), pages 670-688, May.
    5. Marc J. Melitz, 2003. "The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry Productivity," Econometrica, Econometric Society, vol. 71(6), pages 1695-1725, November.
    6. Robert C. Feenstra & Gordon H. Hanson, 1999. "The Impact of Outsourcing and High-Technology Capital on Wages: Estimates For the United States, 1979–1990," The Quarterly Journal of Economics, Oxford University Press, vol. 114(3), pages 907-940.
    7. Alan Macpherson, 2008. "Producer Service Linkages and Industrial Innovation: Results of a Twelve-Year Tracking Study of New York State Manufacturers," Growth and Change, Wiley Blackwell, vol. 39(1), pages 1-23.
    8. Bernd Görzig & Andreas Stephan, 2002. "Outsourcing and Firm-level Performance," Discussion Papers of DIW Berlin 309, DIW Berlin, German Institute for Economic Research.
    9. Alexander Hijzen & Tomohiko Inui & Yasuyuki Todo, 2010. "Does Offshoring Pay? Firm-Level Evidence From Japan," Economic Inquiry, Western Economic Association International, vol. 48(4), pages 880-895, October.
    10. Davide Antonioli & Massimiliano Mazzanti & Paolo Pini, 2010. "Productivity, innovation strategies and industrial relations in SMEs. Empirical evidence for a local production system in northern Italy," International Review of Applied Economics, Taylor & Francis Journals, vol. 24(4), pages 453-482.
    11. Craig P. Aubuchon & Subhayu Bandyopadhyay & Sumon Bhaumik, 2012. "The extent and impact of outsourcing: evidence from Germany," Review, Federal Reserve Bank of St. Louis, issue July, pages 287-304.
    12. Fiorenza Belussi & Silvia R. Sedita, 2012. "Industrial Districts as Open Learning Systems: Combining Emergent and Deliberate Knowledge Structures," Regional Studies, Taylor & Francis Journals, vol. 46(2), pages 165-184, April.
    13. Roberto Antonietti & Maria Rosaria Ferrante & Riccardo Leoncini, 2014. "Spatial Agglomeration, Production Technology and the Choice to Make and/or Buy: Empirical Evidence from the Emilia Romagna Machine Tool Industry," Regional Studies, Taylor & Francis Journals, vol. 48(2), pages 284-300, February.
    14. Robertson, Paul L. & Langlois, Richard N., 1995. "Innovation, networks, and vertical integration," Research Policy, Elsevier, vol. 24(4), pages 543-562, July.
    15. Williamson, Oliver E, 1973. "Markets and Hierarchies: Some Elementary Considerations," American Economic Review, American Economic Association, vol. 63(2), pages 316-325, May.
    16. Volker Mahnke, 2001. "The Process of Vertical Dis-Integration: An Evolutionary Perspective on Outsourcing," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 5(3), pages 353-379, September.
    17. Lucia Cusmano & Maria Luisa Mancusi & Andrea Morrison, 2010. "Globalization of Production and Innovation: How Outsourcing is Reshaping an Advanced Manufacturing Area," Regional Studies, Taylor & Francis Journals, vol. 44(3), pages 235-252.
    18. Davide Antonioli & Annaflavia Bianchi & Massimiliano Mazzanti & Sandro Montresor & Paolo Pini, 2013. "Innovation Strategies and Economic Crisis: Evidence from Firm-level Italian Data," Economia politica, Società editrice il Mulino, issue 1, pages 33-68.
    19. James H. Love & Stephen Roper, 2001. "articles: Outsourcing in the innovation process: Locational and strategic determinants," Papers in Regional Science, Springer;Regional Science Association International, vol. 80(3), pages 317-336.
    20. Jonathan Michie & Maura Sheehan, 2003. "Labour market deregulation, 'flexibility' and innovation," Cambridge Journal of Economics, Oxford University Press, vol. 27(1), pages 123-143, January.
    21. Helsley, Robert W. & Strange, William C., 2007. "Agglomeration, opportunism, and the organization of production," Journal of Urban Economics, Elsevier, vol. 62(1), pages 55-75, July.
    22. Abraham, Katharine G & Taylor, Susan K, 1996. "Firms' Use of Outside Contractors: Theory and Evidence," Journal of Labor Economics, University of Chicago Press, vol. 14(3), pages 394-424, July.
    23. Karsten Bjerring Olsen, 2006. "Productivity Impacts of Offshoring and Outsourcing: A Review," OECD Science, Technology and Industry Working Papers 2006/1, OECD Publishing.
    24. Massimiliano Mazzanti & Sandro Montresor & Paolo Pini, 2009. "What Drives (or Hampers) Outsourcing? Evidence for a Local Production System in Emilia Romagna," Industry and Innovation, Taylor & Francis Journals, vol. 16(3), pages 331-365.
    25. Gorg, Holger & Hanley, Aoife, 2005. "International outsourcing and productivity: evidence from the Irish electronics industry," The North American Journal of Economics and Finance, Elsevier, vol. 16(2), pages 255-269, August.
    26. Farok J. Contractor & Vikas Kumar & Sumit K. Kundu & Torben Pedersen, 2010. "Reconceptualizing the Firm in a World of Outsourcing and Offshoring: The Organizational and Geographical Relocation of High-Value Company Functions," Journal of Management Studies, Wiley Blackwell, vol. 47(s2), pages 1417-1433, December.
    27. Lars Bengtsson & Mandar Dabhilkar, 2009. "Manufacturing outsourcing and its effect on plant performance—lessons for KIBS outsourcing," Journal of Evolutionary Economics, Springer, vol. 19(2), pages 231-257, April.
    28. Bruno Crepon & Emmanuel Duguet & Jacques Mairesse, 1998. "Research, Innovation And Productivity: An Econometric Analysis At The Firm Level," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 7(2), pages 115-158.
    29. Ron Boschma, 2005. "Proximity and Innovation: A Critical Assessment," Regional Studies, Taylor & Francis Journals, vol. 39(1), pages 61-74.
    30. Massimiliano Mazzanti & Sandro Montresor & Paolo Pini, 2011. "Outsourcing, delocalization and firm organization: Transaction costs versus industrial relations in a local production system of Emilia Romagna," Entrepreneurship & Regional Development, Taylor & Francis Journals, vol. 23(7-8), pages 419-447.
    31. Gene M. Grossman & Elhanan Helpman, 2002. "Integration versus Outsourcing in Industry Equilibrium," The Quarterly Journal of Economics, Oxford University Press, vol. 117(1), pages 85-120.
    32. Jörn Kleinert, 2003. "Growing Trade in Intermediate Goods: Outsourcing, Global Sourcing, or Increasing Importance of MNE Networks?," Review of International Economics, Wiley Blackwell, vol. 11(3), pages 464-482, August.
    33. Grazia D. Santangelo & Paolo Pini, 2011. "New HRM Practices and Exploitative Innovation: A Shopfloor Level Analysis," Industry and Innovation, Taylor & Francis Journals, vol. 18(6), pages 611-630, August.
    34. Ruthrama Rama & Deron Ferguson & Ana Melero, 2003. "Subcontracting Networks in Industrial Districts: The Electronics Industries of Madrid," Regional Studies, Taylor & Francis Journals, vol. 37(1), pages 71-88.
    35. Brusco, Sebastiano, 1982. "The Emilian Model: Productive Decentralisation and Social Integration," Cambridge Journal of Economics, Oxford University Press, vol. 6(2), pages 167-184, June.
    36. Fernando Merino & Diego Rodríguez Rodríguez, 2007. "Business services outsourcing by manufacturing firms," Industrial and Corporate Change, Oxford University Press, vol. 16(6), pages 1147-1173, December.
    37. Lombardi, Mauro, 2003. "The evolution of local production systems: the emergence of the "invisible mind" and the evolutionary pressures towards more visible "minds"," Research Policy, Elsevier, vol. 32(8), pages 1443-1462, September.
    38. Erol Taymaz & Yilmaz Kilicaslan, 2005. "Determinants of subcontracting and regional development: An empirical study on Turkish textile and engineering industries," Regional Studies, Taylor & Francis Journals, vol. 39(5), pages 633-645.
    39. Paul Windrum & Andreas Reinstaller & Christopher Bull, 2009. "The outsourcing productivity paradox: total outsourcing, organisational innovation, and long run productivity growth," Journal of Evolutionary Economics, Springer, vol. 19(2), pages 197-229, April.
    40. Jonathan P. Doh, 2005. "Offshore Outsourcing: Implications for International Business and Strategic Management Theory and Practice," Journal of Management Studies, Wiley Blackwell, vol. 42(3), pages 695-704, May.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:growch:v:46:y:2015:i:2:p:292-320. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley Content Delivery) or (Christopher F. Baum). General contact details of provider: http://www.blackwellpublishing.com/journal.asp?ref=0017-4815 .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.