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Spatial Agglomeration, Technology and Outsourcing of Knowledge Intensive Business Services. Empirical Insights from Italy

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  • Antonietti, Roberto
  • Cainelli, Giulio

Abstract

Aim of this paper is to explore the main drivers of outsourcing of knowledge intensive business services by Italian manufacturing firms. While anecdotal and empirical evidence has emphasized labour cost and scale economies as behind firms' choices to outsource production or service activities, here we focus on spatial agglomeration and technology as important factors. Using microeconomic data on a repeated cross-section of Italian manufacturing firms for the period 1998-2003, we develop a two-stage model in order to avoid selection bias: first, we estimate the determinants of the firm's decision to outsource business-related services; second, we estimate the main factors underlying the intensity and complexity of KIBS outsourcing, expressed by the number of service activities that are externalized. Our results show that labour cost-savings are not relevant in driving the decision to outsource KIBS, but ICT, R&D and location within a dense and technologically developed industrial district have very positive effects.

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  • Antonietti, Roberto & Cainelli, Giulio, 2007. "Spatial Agglomeration, Technology and Outsourcing of Knowledge Intensive Business Services. Empirical Insights from Italy," Knowledge, Technology, Human Capital Working Papers 8221, Fondazione Eni Enrico Mattei (FEEM).
    • Handle: RePEc:ags:feemkt:8221
    DOI: 10.22004/ag.econ.8221
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    2. Paul L. Robertson & David Jacobson & Richard N. Langlois, 2009. "Innovation Processes and Industrial Districts," Chapters, in: Giacomo Becattini & Marco Bellandi & Lisa De Propis (ed.), A Handbook of Industrial Districts, chapter 21, Edward Elgar Publishing.
    3. Roberto Antonietti & Maria Rosaria Ferrante & Riccardo Leoncini, 2016. "Local market size, social capital and outsourcing: evidence from Emilia Romagna," Small Business Economics, Springer, vol. 47(1), pages 243-260, June.
    4. Valentina Meliciani & Maria Savona, 2015. "The determinants of regional specialisation in business services: agglomeration economies, vertical linkages and innovation," Journal of Economic Geography, Oxford University Press, vol. 15(2), pages 387-416.
    5. Pinuccia Calia & Maria Ferrante, 2013. "How do firms combine different internationalisation modes? A multivariate probit approach," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 149(4), pages 663-696, December.
    6. Charlie Karlsson & Urban Gråsjö & Sofia Wixe (ed.), 2015. "Innovation and Entrepreneurship in the Global Economy," Books, Edward Elgar Publishing, number 15906.
    7. Roberto Antonietti & Maria Rosaria Ferrante & Riccardo Leoncini, 2014. "Trust your neighbour. Industrial relatedness, social capital and outsourcing," Papers in Evolutionary Economic Geography (PEEG) 1403, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Jan 2014.
    8. 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.
    9. Antonietti, Roberto & Cainelli, Giulio & Lupi, Claudio, 2013. "Vertical disintegration and spatial co-localization: The case of Kibs in the metropolitan region of Milan," Economics Letters, Elsevier, vol. 118(2), pages 360-363.
    10. Timmermans, Bram & Fitjar, Rune Dahl, 2015. "Skill Relatedness in Norway by Bram Timmermans and Rune Dahl Fitjar," UiS Working Papers in Economics and Finance 2015/20, University of Stavanger.
    11. Roberto Antonietti & Giulio Cainelli, 2011. "Geographic concentration and vertical disintegration in KIBS: evidence from the metropolitan area of Milan," Openloc Working Papers 1105, Public policies and local development.
    12. Ohnemus, Jörg, 2009. "Productivity effects of business process outsourcing: a firm-level investigation based on panel data," ZEW Discussion Papers 09-088, ZEW - Leibniz Centre for European Economic Research.
    13. García-Quevedo, José & Mas-Verdú, Francisco & Montolio, Daniel, 2011. "What type of innovative firms acquire knowledge intensive services and from which suppliers?," INGENIO (CSIC-UPV) Working Paper Series 201108, INGENIO (CSIC-UPV).
    14. Nobuo Kobayashi & Takeshi Mori, 2022. "An Empirical Study on the Relationship of Regional Entrepreneurial Activities and Utilization of Digital Technology in Knowledge-Intensive Business Services (KIBS)," Discussion Paper Series 234, School of Economics, Kwansei Gakuin University.
    15. Roberto Antonietti & Giulio Cainelli, 2012. "Urban size and KIBS vertical disintegration: Evidence from Lombardy," ERSA conference papers ersa12p666, European Regional Science Association.
    16. Roberto Antonietti & Maria Rosaria Ferrante & Riccardo Leoncini, 2015. "Infrastructure endowment, social capital and outsourcing: evidence from Emilia Romagna, Italy," Chapters, in: Charlie Karlsson & Urban Gråsjö & Sofia Wixe (ed.), Innovation and Entrepreneurship in the Global Economy, chapter 13, pages 310-330, Edward Elgar Publishing.
    17. Daria Ciriaci & Sandro Montresor & Daniela Palma, 2013. "Do KIBS make manufacturing more innovative? An empirical investigation for four European countries," JRC Working Papers on Corporate R&D and Innovation 2013-04, Joint Research Centre.
    18. Mauro Capestro & Elisabetta Tarantino & Fabrizio Morgangni & Eleonora Tricarico & Gianluigi Guido, 2014. "Distretti calzaturieri in crisi: cause del declino e strategie di rinnovamento," ECONOMIA E SOCIET? REGIONALE, FrancoAngeli Editore, vol. 2014(1), pages 187-212.

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    More about this item

    Keywords

    Labor and Human Capital;

    JEL classification:

    • L24 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Contracting Out; Joint Ventures
    • L84 - Industrial Organization - - Industry Studies: Services - - - Personal, Professional, and Business Services
    • R32 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Other Spatial Production and Pricing Analysis
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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