Production Outsourcing, Organizational Governance and Firm’s Technological Performance: Evidence from Italy

Arbeitspapier

Aim of this paper is to study whether and how the firm’s decision to outsource production activities affects its technological performance. In particular, we look at how the alignment between the firm’s governance strategy and the underlying attributes of the transactions affects the capacity of the firm to introduce new products and processes. Using microeconomic data on a repeated cross-section of Italian manufacturing firms for the period 1998-2003, we develop a two-stage approach: first, we estimate the determinants of the firm’s organizational governance (production outsourcing); second, we incorporate a measure of governance misalignment into a technological performance relation. We find (i) that firms not aligned with the optimal organizational governance perform less well in terms of process innovation than more aligned competitors, but (ii) that misalignment has a positive effect on product innovation. However, this counterintuitive result is strongly characterized by non-linear effects that reverse the latter correlation for high values of governance misfit.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Nota di Lavoro ; No. 58.2007

Classification and Topics

• Classification: Wirtschaft ; Organization of Production ; Contracting Out; Joint Ventures; Technology Licensing ; Firm Performance: Size, Diversification, and Scope ; Innovation and Invention: Processes and Incentives
• Subject: Production Outsourcing ; Organizational Governance ; Misalignment ; Technological Performance ; Non-Linearity ; Outsourcing ; Technischer Fortschritt ; Innovation ; Verarbeitendes Gewerbe ; Italien

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Antonietti, Roberto ; Cainelli, Giulio
• Event: Veröffentlichung
• (who): Fondazione Eni Enrico Mattei (FEEM)
• (where): Milano
• (when): 2007

Further information

• Handle: http://hdl.handle.net/10419/74043
• Last update: 10.03.2025, 11:41 AM CET