Recent urban economics studies identify spatial agglomeration as a key element for determining the degree of vertical disintegration of firms, because it reduces transport, search and managerial costs, but also the scope for opportunistic behaviour. Relying on a unique dataset on small machine-tool firms located in Emilia Romagna, Italy, we empirically isolate the effect of spatial and technological proximity from the effect of social capital on the propensity to fully or partially outsource production activities. We focus on a series of 29 production phases, from design to repairing, for which we know if they have been operated in-house or outside the firm. After controlling for endogeneity, we find that: (i) full outsourcing is positively related to social capital, but such an effect vanishes as the technological proximity among firms increases; (ii) firms engage in concurrent sourcing only when technological proximity is high; (iii) geo-technological proximity and social capital act like substitute in driving concurrent sourcing. The phase-estimates confirm this picture, and show that, while proximity matters for the full outsourcing of the earliest stages of production, social capital does matter for the core assembling and post-production stages.
Trust your neighbour: proximity, social capital and outsourcing
ANTONIETTI, ROBERTO;
2013
Abstract
Recent urban economics studies identify spatial agglomeration as a key element for determining the degree of vertical disintegration of firms, because it reduces transport, search and managerial costs, but also the scope for opportunistic behaviour. Relying on a unique dataset on small machine-tool firms located in Emilia Romagna, Italy, we empirically isolate the effect of spatial and technological proximity from the effect of social capital on the propensity to fully or partially outsource production activities. We focus on a series of 29 production phases, from design to repairing, for which we know if they have been operated in-house or outside the firm. After controlling for endogeneity, we find that: (i) full outsourcing is positively related to social capital, but such an effect vanishes as the technological proximity among firms increases; (ii) firms engage in concurrent sourcing only when technological proximity is high; (iii) geo-technological proximity and social capital act like substitute in driving concurrent sourcing. The phase-estimates confirm this picture, and show that, while proximity matters for the full outsourcing of the earliest stages of production, social capital does matter for the core assembling and post-production stages.
Pubblicazioni consigliate
I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.
