The Impact of Vertical Integration and Outsourcing on Firm Efficiency: Evidence from the Italian Machine Tool Industry
In this paper we made use of an econometric approach to efficiency analysis in order to capture the role of vertical integration and outsourcing on firm's efficiency. Vertical integration is considered an indicator of structure, while outsourcing represents the process of its change. We consider inefficiency measures as indicators of organizational heterogeneity, related to the firm's choices regarding the phases of the production process that are under its control. We find support for the hypothesis of a relationship between vertical integration and efficiency. The results on outsourcing activity, and in particular the interaction between outsourcing and vertical structure, indicate that heterogeneous patterns, far from tending to cancel out each other as a consequence of common external changes, are reinforcing. Moreover, the sensitivity of inefficiency variance to the cycle, indicate that different firms may have different dynamic properties.
|Date of creation:||Mar 2010|
|Date of revision:||11 Mar 2010|
|Contact details of provider:|| Postal: via Inama, 5 -- I-38100 Trento TN|
Web page: http://www.unitn.it/disa
More information through EDIRC
|Order Information:|| Postal: DISA Università degli Studi di Trento via Inama, 5 I-38122 Trento TN Italy|
Web: http://www.unitn.it/disa Email:
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Christian Ritter & Léopold Simar, 1997.
"Pitfalls of Normal-Gamma Stochastic Frontier Models,"
Journal of Productivity Analysis,
Springer, vol. 8(2), pages 167-182, May.
- Ritter, C. & Simar, L., "undated". "Pitfalls of normal-gamma stochastic frontier models," CORE Discussion Papers RP 1272, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- RITTER, Christian & SIMAR, Leopold, 1994. "Pitfalls of Normal-Gamma Stochastic Frontier Models," CORE Discussion Papers 1994041, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Zhengfei Guan & Subal C. Kumbhakar & Robert J. Myers & Alfons Oude Lansink, 2005. "Measuring Excess Capital Capacity in Agricultural Production," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 91(3), pages 765-776.
- Rolfo Secondo, 1998. "L'industria italiana della meccanica strumentale di fronte alla globalizzazione: opportunità e limiti," L'industria, Società editrice il Mulino, issue 4, pages 881-894.
- Caudill, Steven B. & Ford, Jon M., 1993. "Biases in frontier estimation due to heteroscedasticity," Economics Letters, Elsevier, vol. 41(1), pages 17-20.
- Rolfo Secondo & Calabrese Giuseppe, 2006. "Struttura industriale e profili di competitività nella meccanica strumentale," L'industria, Società editrice il Mulino, issue 4, pages 603-622.
- Shleifer, Andrei & Vishny, Robert W, 1986. "Large Shareholders and Corporate Control," Journal of Political Economy, University of Chicago Press, vol. 94(3), pages 461-488, June.
- Shleifer, Andrei & Vishny, Robert W., 1986. "Large Shareholders and Corporate Control," Scholarly Articles 3606237, Harvard University Department of Economics.
- Jayesh Kumar, 2003. "Ownership Structure and Corporate Firm Performance," Finance 0304004, EconWPA.
- M. Diaz & Rosario Sanchez, 2008. "Firm size and productivity in Spain: a stochastic frontier analysis," Small Business Economics, Springer, vol. 30(3), pages 315-323, March.
- Rosario Sanchez & Maria Angeles Diaz, "undated". "Firms' Size and Productivity in Spain: a Stochastic Frontier Analysis," EcoMod2006 272100076, EcoMod.
- Antonio Alvarez & Christine Amsler & Luis Orea & Peter Schmidt, 2006. "Interpreting and Testing the Scaling Property in Models where Inefficiency Depends on Firm Characteristics," Journal of Productivity Analysis, Springer, vol. 25(3), pages 201-212, 06.
- Peter Schmidt & Antonio Alvarez & Christine Amsler, 2004. "Interpreting and testing the scaling property in models where inefficiency depends on firm characteristics," Econometric Society 2004 Far Eastern Meetings 520, Econometric Society.
- Álvarez, Antonio & Amsler, Christine & Orea, Luis & Schmidt Peter, 2005. "Interpreting and Testing the Scaling Property in Models where Inefficiency Depends on Firm Characteristics," Efficiency Series Papers 2005/03, University of Oviedo, Department of Economics, Oviedo Efficiency Group (OEG).
- Karsten Bjerring Olsen, 2006. "Productivity Impacts of Offshoring and Outsourcing: A Review," OECD Science, Technology and Industry Working Papers 2006/1, OECD Publishing.
- Caudill, Steven B & Ford, Jon M & Gropper, Daniel M, 1995. "Frontier Estimation and Firm-Specific Inefficiency Measures in the Presence of Heteroscedasticity," Journal of Business & Economic Statistics, American Statistical Association, vol. 13(1), pages 105-111, January.
- Erol Taymaz, 2005. "Are Small Firms Really Less Productive?," Small Business Economics, Springer, vol. 25(5), pages 429-445, December.
- Kumbhakar, Subal C., 1990. "Production frontiers, panel data, and time-varying technical inefficiency," Journal of Econometrics, Elsevier, vol. 46(1-2), pages 201-211.
- Bojani, Antonio N. & Caudill, Steven B. & Ford, Jon M., 1998. "Small-sample properties of ML, COLS, and DEA estimators of frontier models in the presence of heteroscedasticity," European Journal of Operational Research, Elsevier, vol. 108(1), pages 140-148, July.
- Cornwell, Christopher & Schmidt, Peter & Sickles, Robin C., 1990. "Production frontiers with cross-sectional and time-series variation in efficiency levels," Journal of Econometrics, Elsevier, vol. 46(1-2), pages 185-200.
- Cornwell, Christopher & Schmidt, Peter & Sickles, Robin C., 1989. "Production Frontiers With Cross-Sectinal And Time-Series Variation In Efficiency Levels," Working Papers 89-18, C.V. Starr Center for Applied Economics, New York University.
- Aigner, Dennis & Lovell, C. A. Knox & Schmidt, Peter, 1977. "Formulation and estimation of stochastic frontier production function models," Journal of Econometrics, Elsevier, vol. 6(1), pages 21-37, July.
- Greene, William, 2005. "Reconsidering heterogeneity in panel data estimators of the stochastic frontier model," Journal of Econometrics, Elsevier, vol. 126(2), pages 269-303, June. Full references (including those not matched with items on IDEAS)
When requesting a correction, please mention this item's handle: RePEc:trt:disawp:1001. 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: (Roberto Gabriele)
If references are entirely missing, you can add them using this form.