Local market size, social capital and outsourcing: evidence from Emilia Romagna

Abstract

Based on a unique dataset concerning small firms operating in the machinery and equipment industry in Emilia Romagna (Italy), we estimate the separate effects of social capital and local market size on the probability to either fully or partially outsource parts of the production process. We are able to distinguish 29 different phases of the production cycle, from design, to early processing to post-production. Our estimates show that: (i) social capital influences the full outsourcing of core assembly and post-assembly activities, while local market size affects the full outsourcing of early processing activities; (ii) neither social capital nor local market size have a statistically significant effect on the probability of partially outsourcing any step of the production process. Robustness tests confirm our results vis-à-vis the endogeneity of the local market size and social capital, and the potential Modifiable Area Unit Problem relating to local market size

Onshore-offshore location decision for high-tech shipbuilding projects

“…In advanced clusters, knowledge and knowledge diffusion processes may be regarded as the key resources (Malmberg & Maskell, 2002), and this is the field-specificity for the conceptualization of social capital in our analysis. Antoniette, Ferrante, & Leoncini (2016) find that social capital, measured as a standardized index following the standard catch-all definitions, has positive effects on the probability of outsourcing within the cluster, that is, outsourcing and onshoring. Since the catch-all view encompasses the narrower view focusing on key resources such as knowledge and knowledge diffusion processes, we propose the following hypothesis: Hypothesis H1: Higher social capital increases the probability of onshoring.…”

Multidimensional Model of High-Growth Companies: Do COVID-19 and the Ukraine–Russia Crisis Lead to Differences?

“…The two dimensions of intangible capital studied, i.e., network capability and human capital, can be associated with the measures HGCs take to overcome financial constraints. They can influence the quality and format of information to which HGCs have access [59], shape network connections by organizing and seeking alliances or business partners for joint projects [60], or help in outsourcing decisions [61,62].…”

Social capital, resilience, and regional diversification in Italy

“…Social capital has been extensively utilized to explain economic phenomena (Westlund and Adams 2010), such as entrepreneurship (Westlund and Bolton 2003;Levitte 2004), economic development (e.g. Knack and Keefer 1997;Açkomak and Ter Weel 2009;Beugelsdijk and Smulders 2009;Pan and He 2010), innovation (Crescenzi et al 2013) and outsourcing (Antonietti et al 2016).…”

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