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

  • Roberto Antonietti

    (University of Bologna)

  • Giulio Cainelli

    (University of Bari and CERIS-CNR)

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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Paper provided by Fondazione Eni Enrico Mattei in its series Working Papers with number 2007.79.

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Date of creation: Jul 2007
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Handle: RePEc:fem:femwpa:2007.79
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  1. Muller, Emmanuel & Zenker, Andrea, 2001. "Business services as actors of knowledge transformation: the role of KIBS in regional and national innovation systems," Research Policy, Elsevier, vol. 30(9), pages 1501-1516, December.
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  16. Giulio CAINELLI & Riccardo Leoncini & Anna MONTINI, 2007. "Spatial knowledge spillovers and regional productivity growth in Europe," Revue d'économie régionale et urbaine, Armand Colin, vol. 0(2), pages 201-221.
  17. Feenstra, Robert C & Hanson, Gordon H, 1996. "Globalization, Outsourcing, and Wage Inequality," American Economic Review, American Economic Association, vol. 86(2), pages 240-45, May.
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  19. Cainelli, Giulio & Mancinelli, Susanna & Mazzanti, Massimiliano, 2007. "Social capital and innovation dynamics in district-based local systems," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 36(6), pages 932-948, December.
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