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

Abstract

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

Outsourcing and Productivity During Economic Crisis: Evidence from Indian Manufacturing Firms

“…However, job creation for high-skilled workers compensated partly for the job losses. In addition to these, there is a considerable country-specific interest in the effect of outsourcing, domestic and international, on productivity and efficiency at the firm level (viz., (Antonioli, Mazzanti, Montresor, & Pini, 2015, for Italy; (Aubuchon, Bandyopadhyay, & Bhaumik,2012,for Germany; (Egger, Pfaffermayr, & Wolfmayr-Schnitzer, 2001, for Austria; (Görg & Hanley, 2005, for Irish electronic industry; (Ito, Tomiura, & Wakasugi,2011,for Japanese firms; (Jabbour, 2010, for French manufacturing industry; (López, 2014,for Spanish manufacturing firms; (McCann, 2011, using a census of Irish manufacturing firms; (Tomohiko & Naomi, 2016, for Japanese overseas firms; etc. ).…”

CO2-reducing innovations and outsourcing: Evidence from photovoltaics and green construction in North-East Italy

“…In particular, outsourcing and other business relationships embedded in the territory (e.g. cooperation and technology transfer) emerge as idiosyncratic drivers of both technological and eco-innovations of the kind that we consider here Antonioli et al, 2014). This local specification of the green industry phenomenon has been one of the topics of a recent international research project, called OPENLOC (http://openloc.unitn.it/), within which a dedicated survey has been carried out on the two focal industries of the paper, with respect to four administrative regions (NUTS 2) in the North-East of Italy: Emilia Romagna, Friuli Venezia Giulia, Trentino Alto Adige and…”

The Impact of Labour Force Reduction on the Financial Performance of Manufacturing Companies

“…The positive relationship is accompanied with cost savings and cost efficiency (Arvanitis and Loukis, 2012). This is supported by Antonioli et al (2015) who emphasized that externalisation of high value added activities such as research and development and HRM results in productivity growth. Oke and Onwuegbuzie (2013) emphasized that outsourcing ameliorates an organisation's product innovativeness as externally contracted service providers seek to advance and differentiate their services to maintain their service contract.…”

“…Outsourcing: Antonioli et al (2015), Agrawal and Hall (2014) and Agrawal and Haleem (2013) concur that outsourcing is a labour force reduction strategy that assists an organisation to reduce costs and improve production efficiency in production and the quality of products. There is a significant positive relationship between outsourcing and industrial productivity and innovation process performance.…”

“…However, the practise increases other organisational costs associated with the service or production process outsourced and Wickford (2016) asserts that outsourcing is associated with job loss fear and employee insecurity which deters productivity among employees proving detrimental to an organisation. Outsourcing low value added services has a negative effect on productivity further adding that turning fixed expenses into variable costs by moving low value added activities such as ancillary services outside an organisations borders does not result in cost saving (Antonioli et al, 2015). Cuillan and Andi -Zheng (2017) assert that outsourcing certain activities results in time lags for related activities lasting as long as three days, illustrating how outsourcing can cripple the efficiency of product and service delivery to customers.…”