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Supply chains and the internationalization of small firms

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  • Giorgia Giovannetti
  • Enrico Marvasi

    ()

  • Marco Sanfilippo

Abstract

This paper explores the relation between supply-chain participation and the internationalization of firms. We show that even small and less productive firms, if involved in production chains, can take advantage of reduced costs of entry and economies of scale that enhance their probability of exporting. The empirical analysis is carried out on an original database, obtained by merging and matching balance-sheet data with data from a survey on over 25,000 Italian firms, which include direct information on the involvement in supply chains. We find a positive and significant relation between being part of a supply chain and the probability of exporting, as well as the intensive margin of trade. The number of foreign markets served (the extensive margin), on the other hand, does not seem to be affected. We also investigate whether being in different positions along the chain, i.e., upstream or downstream, matters, and we find that downstream producers tend to benefit more. Our results are robust to different specifications, estimation methods, and the inclusion of the control variables typically used in heterogeneous firms models. Copyright Springer Science+Business Media New York 2015

Suggested Citation

  • Giorgia Giovannetti & Enrico Marvasi & Marco Sanfilippo, 2015. "Supply chains and the internationalization of small firms," Small Business Economics, Springer, vol. 44(4), pages 845-865, April.
  • Handle: RePEc:kap:sbusec:v:44:y:2015:i:4:p:845-865
    DOI: 10.1007/s11187-014-9625-x
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    Citations

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    Cited by:

    1. Giovannetti, Giorgia & Marvasi, Enrico, 2016. "Food exporters in global value chains: Evidence from Italy," Food Policy, Elsevier, vol. 59(C), pages 110-125.
    2. Freddy Cepeda-Lopez & Fredy Gamboa-Estrada & Carlos León & Hernán Rincón-Castro, 2019. "Colombian liberalization and integration to world trade markets: Much ado about nothing," Borradores de Economia 1065, Banco de la Republica de Colombia.
    3. repec:spr:weltar:v:153:y:2017:i:4:d:10.1007_s10290-017-0292-2 is not listed on IDEAS
    4. Davide Del Prete & Giorgia Giovannetti & Enrico Marvasi, 2017. "Global value chains participation and productivity gains for North African firms," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 153(4), pages 675-701, November.
    5. Patricio Aroca & Randall Jackson, 2018. "Value Chains: Production Upstreamness and Downstreamness Revisited," Working Papers Working Paper 2018-01_R1, Regional Research Institute, West Virginia University.
    6. Montalbano, Pierluigi & Nenci, Silvia & Pietrobelli, Carlo, 2017. "Opening and linking up: Firms, global value chains and productivity in Latin America," MERIT Working Papers 030, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    7. repec:kap:sbusec:v:48:y:2017:i:3:d:10.1007_s11187-016-9788-8 is not listed on IDEAS
    8. repec:kap:sbusec:v:50:y:2018:i:4:d:10.1007_s11187-017-9902-6 is not listed on IDEAS

    More about this item

    Keywords

    Supply chains; Global value chains; Internationalization; Small and medium enterprises; Heterogeneous firms; F12; F14; F21; L26;

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship

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