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

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  • 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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  • Cusmano, Lucia & Mancusi, Maria Luisa & Morrison, Andrea, 2009. "Innovation and the geographical and organisational dimensions of outsourcing: Evidence from Italian firm-level data," Structural Change and Economic Dynamics, Elsevier, vol. 20(3), pages 183-195, September.
    • Handle: RePEc:eee:streco:v:20:y:2009:i:3:p:183-195
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    2. Damián Tojeiro-Rivero & Rosina Moreno & Erika Badillo, 2016. "“Breakthrough innovations: The impact of foreign acquisition of knowledge”," AQR Working Papers 201610, University of Barcelona, Regional Quantitative Analysis Group, revised Nov 2016.
    3. Malerba, Franco & Orsenigo, Luigi, 2010. "User-producer relations, innovation and the evolution of market structures under alternative contractual regimes," Structural Change and Economic Dynamics, Elsevier, vol. 21(1), pages 26-40, March.
    4. Damián Tojeiro-Rivero & Rosina Moreno & Erika Raquel Badillo, 2019. "Radical Innovations: The Role of Knowledge Acquisition from Abroad," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 55(2), pages 173-207, September.
    5. García-Vega, María & Huergo, Elena, 2019. "The role of international and domestic R&D outsourcing for firm innovation," Journal of Economic Behavior & Organization, Elsevier, vol. 157(C), pages 775-792.
    6. Carboni, Oliviero A., 2013. "Heterogeneity in R&D collaboration: An empirical investigation," Structural Change and Economic Dynamics, Elsevier, vol. 25(C), pages 48-59.
    7. Marina Papanastassiou & Robert Pearce & Antonello Zanfei, 2020. "Changing perspectives on the internationalization of R&D and innovation by multinational enterprises: A review of the literature," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 51(4), pages 623-664, June.
    8. Valeria Gattai & Valentina Trovato, 2014. "Estimating sourcing premia with Italian regional data," Working Papers 276, University of Milano-Bicocca, Department of Economics, revised Jun 2014.
    9. Lorena D’Agostino, 2015. "The neglected effects of R&D captive offshoring in emerging countries on the creation of knowledge at home," Economia e Politica Industriale: Journal of Industrial and Business Economics, Springer;Associazione Amici di Economia e Politica Industriale, vol. 42(1), pages 61-91, March.
    10. Gattai Valeria & Trovato Valentina, 2016. "Estimating Sourcing Premia Using Italian Regional Data," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 16(2), pages 1029-1067, April.
    11. Hanen Sdiri & Mohamed Ayadi, 2016. "Innovation and service outsourcing: an empirical analysis based on data from Tunisian firms," Journal of Innovation and Entrepreneurship, Springer, vol. 5(1), pages 1-13, December.
    12. Baier , Elisabeth & Rammer , Christian & Schubert , Torben, 2013. "The Impact of Innovation Off-shoring on Organizational Adaptability," Papers in Innovation Studies 2013/44, Lund University, CIRCLE - Centre for Innovation Research.
    13. 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.
    14. Martina Musteen & Mujtaba Ahsan, 2013. "Beyond Cost: The Role of Intellectual Capital in Offshoring and Innovation in Young Firms," Entrepreneurship Theory and Practice, , vol. 37(2), pages 421-434, March.

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