The smile curve at the firm level: Where value is added along supply chains

Rungi, Armando; Prete, Davide Del

doi:10.1016/j.econlet.2017.12.038

Cited by 68 publications

(35 citation statements)

References 12 publications

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“…A small number of papers have been able to investigate whether the position of a firm in a GVC matters for the creation of value. 2 Rungi and Del Prete (2018) address this question with data on firms located in the European Union, and a downstreamness measure sourced from Antràs and Chor (2013).…”

Section: Introductionmentioning

confidence: 99%

“…A small number of articles have been able to investigate whether the position of a firm in a GVC matters for the creation of value 2 . Rungi and Del Prete (2018) address this question with data on firms located in the European Union, and a downstreamness measure sourced from Antràs and Chor (2013). Interestingly, the authors uphold the intuition behind the U‐shaped value generation curve and reveal a pattern of domestic value retention in the origin (developed) country of the firm.…”

Section: Introductionmentioning

confidence: 99%

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Upstreamness, Wages and Gender: Equal Benefits for All?

Gagliardi

Mahy

Rycx

2019

Brit J Industrial Rel

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Any opinions expressed in this paper are those of the author(s) and not those of IZA. Research published in this series may include views on policy, but IZA takes no institutional policy positions. The IZA research network is committed to the IZA Guiding Principles of Research Integrity. The IZA Institute of Labor Economics is an independent economic research institute that conducts research in labor economics and offers evidence-based policy advice on labor market issues. Supported by the Deutsche Post Foundation, IZA runs the world's largest network of economists, whose research aims to provide answers to the global labor market challenges of our time. Our key objective is to build bridges between academic research, policymakers and society. IZA Discussion Papers often represent preliminary work and are circulated to encourage discussion. Citation of such a paper should account for its provisional character. A revised version may be available directly from the author.

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Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Upstreamness, Wages and Gender: Equal Benefits for All?

Gagliardi

Mahy

Rycx

2019

Brit J Industrial Rel

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“…The WIOTs distinguish two services sectors that are of interest, namely 'Scientific research and development' and 'Advertising and market research'. At face value, these two sectors might be considered to be upstream and downstream, respectively, as, for example, in Rungi and Del Prete (2018). However, the findings suggest that the scientific research and development sector is one of the most downstream sectors (see the row in italics in Table A1).…”

Section: Upstreamness and Downstreamnessmentioning

confidence: 99%

Firm productivity and functional specialisation

et al. 2020

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A defining characteristic of our modern economy is the fragmentation of production across national borders (Amador & Cabral, 2017;Baldwin, 2016). This fragmentation involves the cross-border flow of physical inputs and a range of professional business functions, such as design, engineering, sourcing, marketing and after-sales services of consumer products (Feenstra, 1998;Timmer et al., 2019). As production has been unbundled, firms have specialised in activities. 1 The best-known example is the iPhone. On the back of the iPhone, it reads designed by Apple in California, but assembled by Foxconn in Guangdong. Does specialisation in activities, such as in the design or assembly, relate to levels of economic development? Or, to narrow it down since value added per worker is closely associated with wages and living standards: Does functional specialisation relate to productivity?This paper proposes a straightforward yet novel approach to measure the specialisation of firms and provides an empirical test of the relation between firm productivity and functional specialisation.We measure the functional specialisation of firms using unique data from two survey rounds in 2012 and 2017, in which Dutch firms report on the composition of their employees by function. The surveys we use were administered by Statistics Netherlands and sent to private firms with at least 50 employees. Managers who complete such surveys indicate the allocation of their employees across business functions is a natural way for them to categorise their workers (Sturgeon & Gereffi, 2009).

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“…Similar data structures have been used in Alviarez et al (2016), Cravino and Levchenko (2017), Del Prete and Rungi (2017). 14 The Network Distance between any input and any output in the U.S. I-O tables is the minimum number of downstream linkages that connect them through 15 For similar mappings of firm-level sourcing based on input-output tables and industry affiliations, see Charlton (2009), Acemoglu et al (2010), Alfaro et al (2016), Rungi and Del Prete (2018). with industry-level estimates of demand elasticity sourced from Broda and Weinstein (2006), and with a measure of input contractibility retrieved from Antràs and Chor (2013).…”

Section: The Role Of the Input Rank In Choices Of Vertical Integrationmentioning

confidence: 99%

Measuring the Input Rank in Global Supply Networks

2019

Self Cite

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In this paper, we introduce the Input Rank as a measure to study the organization of global supply networks at the firm level. We model the case of a firm that needs assessing the technological relevance of each direct and indirect supplier on a network-like production function with labor and intermediate inputs. In our framework, an input is technologically more relevant if a shock on that upstream market can hit harder the marginal costs of a downstream buyer, considering the topology of the supply structure. A higher labor intensity at each stage buffers the transmission of upstream shocks in the network. In addition, we provide for the possibility that producers have limited knowledge of inputs in the supply network, hence they can underestimate the relevance of more distant inputs. After applications, the Input Rank returns a matrix of technological centralities that order any direct or indirect input for a representative firm in any output industry. We compute the Input Rank on U.S. and world input-output tables. Finally, we test how it correlates with choices of vertical integration made by 20,489 U.S. parent companies controlling 154,836 affiliates worldwide. We find that a higher Input Rank is positively associated with higher odds that that input is vertically integrated, relatively more when final demand is elastic. A supplier's Input Rank remains a significant predictor of a firm's decision to integrate even after controlling for the relative positions on upstreamness/downstreamness segments.

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The smile curve at the firm level: Where value is added along supply chains

Cited by 68 publications

References 12 publications

Upstreamness, Wages and Gender: Equal Benefits for All?

Upstreamness, Wages and Gender: Equal Benefits for All?

Firm productivity and functional specialisation

Measuring the Input Rank in Global Supply Networks

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