Outsourcing and Firm Productivity in a Specific Local Production System: Evidence from Reggio Emilia (Italy)

Authors

  • Davide Antonioli,

  • Massimiliano Mazzanti,

  • Sandro Montresor,

  • Paolo Pini


  • Davide Antonioli is an assistant professor at Department of Economics and Management, University of Ferrara, Ferrara, Italy. His e-mail address is: ntndvd@unife.it. Massimiliano Mazzanti is an associate professor at Department of Economics and Management, University of Ferrara, Ferrara, Italy. His e-mail address is: massimiliano.mazzanti@unife.it. Sandro Montresor is an associate professor at Department of Economic Sciences, University of Bologna, Bologna, Italy. His e-mail address is: sandro.montresor@unibo.it. Paolo Pini is a full professor at Department of Economics and Management, University of Ferrara, Ferrara, Italy. His e-mail address is: paolo.pini@unife.it. We are grateful to the CGIL-Reggio Emilia for its support in information and data gathering and we also acknowledge the financial support of the PRIN-MIUR—Competitiveness and levels of governance: knowledge and development of the new economy 2001–2003. Sandro Montresor acknowledges financial support by the Autonomous Province of Trento, as the sponsor of the OPENLOC research project. We are greatly indebted to the referees for their comments and suggestions that helped in a fundamental way to improve the work. We are solely responsible for any errors contained in the article.
  • Although the paper is the result of the joint effort of all the authors, the second section can be attributed to Sandro Montresor, the third section to Davide Antonioli, the fourth section to Davide Antonioli and Sandro Montresor, and the first and last sections to all the authors.

Abstract

This paper investigates the impact of outsourcing on the labor productivity of firms in a specific local production system. A number of hypotheses about the location-specific effects of outsourcing are put forward and tested on a sample of firms in the province of Reggio Emilia (within the Emilia-Romagna region, in North-East Italy). The relationship between outsourcing and productivity turns out positive only if considering the externalization of high value-added activities. On the contrary, it is negative in the case of low value-added activities. This occurs to a greater extent for firms in mature industrial districts, whose socio-economic conditions however do not arrive to magnify the productivity premium of externalizing high value-added ones. The technological innovativeness of the firms instead helps with that, pointing to a developmental use of outsourcing in the area.

Ancillary