Vertical integration and efficiency: an application to the Italian machine tool industry

Pieri, Fabio; Zaninotto, Enrico

doi:10.1007/s11187-011-9367-y

Cited by 24 publications

(25 citation statements)

References 34 publications

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“…Finally, the level of vertical dis-integration, measured as the ratio of external costs over total costs, accounts for differences in outsourcing strategies and vertical boundaries and shows a strongly positive impact on technical efficiency. This result suggests that outsourcing represents a valid instrument for increasing productivity levels, and is consistent with the results of Pieri and Zaninotto (2013) and Manello et al (2015).…”

Section: Second Stage Phasesupporting

confidence: 89%

Technical efficiency, unions and decentralized labor contracts

Devicienti

Manello

Vannoni

2017

European Journal of Operational Research

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This paper explores the link between the presence of unions in the workplace, the adoption of decentralized labor agreements and technical efficiency, using a relatively new methodology and a large sample of Italian manufacturing firms. We apply the Data Envelopment Analysis, and its robust version based on bootstrap theory, to get reliable estimates of technical efficiency at the firm level in a standard first stage. We devote particular attention to the specific technology adopted, by distinguishing 20 different sector frontiers, as well as to the presence of outliers. The obtained efficiency scores are analyzed in a second stage applying a truncated regression model estimated via Maximum Likelihood, following the Simar and Wilson (2007) methodology. Our results highlight that the presence of workplace unionization decreases the level of technical efficiency, while other aspects limiting unions' power such as a strong exposure to international markets, high debt levels or the prevalence of flexible assets partially reduce the union negative effect. However, when firms adopt decentralized labor contracts agreements, the effect on efficiency is positive and partially compensates the unions' effect. The results are robust to the inclusion of many firm characteristics over which managers have no direct control and to different model specifications.

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Section: Second Stage Phasesupporting

confidence: 89%

Technical efficiency, unions and decentralized labor contracts

Devicienti

Manello

Vannoni

2017

European Journal of Operational Research

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“…In line with the literature, we control for size, age, group, and innovation, and the firm's involvement in FDIs (see, for instance, Navaretti et al 2011;Giovannetti et al 2013;Bartoli et al 2014). We also explicitly control for the firm's network participation at local, domestic, Pieri and Zaninotto (2013), in a study on the Italian machinery tool industry, find that: ''the most efficient builders of MTs choose integrated structures, while less efficient firms choose to outsource part of their production process by buying intermediate inputs from other firms.'' (p. 413).…”

Section: Empirical Analysismentioning

confidence: 99%

Supply chains and the internationalization of small firms

2015

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This paper explores the relation between supply-chain participation and the internationalization of firms. We show that even small and less productive firms, if involved in production chains, can take advantage of reduced costs of entry and economies of scale that enhance their probability of exporting. The empirical analysis is carried out on an original database, obtained by merging and matching balance-sheet data with data from a survey on over 25,000 Italian firms, which include direct information on the involvement in supply chains. We find a positive and significant relation between being part of a supply chain and the probability of exporting, as well as the intensive margin of trade. The number of foreign markets served (the extensive margin), on the other hand, does not seem to be affected. We also investigate whether being in different positions along the chain, i.e., upstream or downstream, matters, and we find that downstream producers tend to benefit more. Our results are robust to different specifications, estimation methods, and the inclusion of the control variables typically used in heterogeneous firms models

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“…However, as noticed by Farsi, Filippini and Greene () the TRE model can suffer from the “unobserved variables bias.” In line with Mundlak (), these authors proposed an adjustment based on an auxiliary equation with the group‐means of the explanatory variables, e.g., inputs L and K . The TREM has been successfully implemented in recent studies to correct the TRE model and account for possible correlations between η i and (inputs) explanatory variables (Castiglione et al ; Pieri & Zaninotto, ). The TREM introduces the within‐group means by:

η_{i} = λ_{1} {\overset{L}{true}}_{i} + λ_{2} {\overset{K}{true}}_{i} + ξ_{i},

where

{\overset{X}{true}}_{i} = \frac{1}{T_{i}} \sum_{t = 1}^{T} {\overset{X}{true}}_{i t}, \overset{X}{true} \in false{\overset{L}{true}, \overset{K}{true} false}

are metropolitan area‐specific means, and

ξ \sim i.i.d. N false(0, σ_{ξ}^{2} false)

.…”

Section: Methodological Approachmentioning

confidence: 99%

“…The TREM has been successfully implemented in recent studies to correct the TRE model and account for possible correlations between i and (inputs) explanatory variables (Castiglione et al 2018;Pieri & Zaninotto, 2013). The TREM introduces the within-group means by:…”

Section: Methodological Approachmentioning

confidence: 99%

“…The impacts that creative industries could deliver on economic growth has been addressed by a number of scholars (Cerisola, ; Lee, ; Stam, de Jong, & Marlet, ). More recently, some others have looked at the performance of the sector at both the firm‐level (Castiglione, Infante, & Zieba, ; Kourtit & Nijkamp, ; Pieri & Zaninotto, ) and the regional‐level (Kourtit & Nijkamp, ; Zeng, Hu, & Su, ). The empirical evidence has supported the importance of the sector for the city's socio‐economic development.…”

Section: Introductionmentioning

confidence: 99%

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On the performance of creative industries: Evidence from Mexican metropolitan areas

Benita

2019

Papers in Regional Science

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This paper evaluates the performance of creative industries in 56 Mexican metropolitan areas over the period 1998−2013. Derived from Florida's 3T theory, determinants of inefficiency are examined by focusing on metropolitan area‐related variables. The analysis yields several interesting findings. First, there is a marked heterogeneity in performance, especially within the arts creative sector. Second, there is relatively little robust evidence that inefficiency can be reduced by increments in public investment (technology), “creative students” (talent) or cultural opportunity (tolerance). Thereby the role of local governments developing and implementing differentiated policy strategies could contribute to increase the efficiency of the creative sector.

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Vertical integration and efficiency: an application to the Italian machine tool industry

Cited by 24 publications

References 34 publications

Technical efficiency, unions and decentralized labor contracts

Technical efficiency, unions and decentralized labor contracts

Supply chains and the internationalization of small firms

On the performance of creative industries: Evidence from Mexican metropolitan areas

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