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Outsourcing and Firm Performance: Evidence from the Italian Manufacturing Industry

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  • Pinuccia Calia
  • Silvia Pacei

Abstract

This study presents an empirical analysis of the production outsourcing effect on firm productivity and profitability in the Italian manufacturing industry. This study uses firm-level panel data that were developed by the Italian National Statistical Institute. Using different estimation strategies, we develop panel data models and correct for possible endogeneity bias of the outsourcing with respect to the target variables. We find a non-significant effect of outsourcing on profitability and a significant negative effect of outsourcing on productivity.

Suggested Citation

  • Pinuccia Calia & Silvia Pacei, 2017. "Outsourcing and Firm Performance: Evidence from the Italian Manufacturing Industry," International Journal of Business and Management, Canadian Center of Science and Education, vol. 12(11), pages 1-87, October.
    • Handle: RePEc:ibn:ijbmjn:v:12:y:2017:i:11:p:87
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    References listed on IDEAS

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    1. Liza Jabbour, 2008. "Market Thickness, Sunk Entry Costs, Firm Heterogeneity and the Outsourcing Decision: Empirical Evidence of Manufacturing Firms in France," Discussion Papers 08/20, University of Nottingham, GEP.
    2. Giovanni Dosi & Marco Grazzi & Chiara Tomasi & Alessandro Zeli, 2012. "Turbulence underneath the big calm? The micro-evidence behind Italian productivity dynamics," Small Business Economics, Springer, vol. 39(4), pages 1043-1067, November.
    3. Liza Jabbour, 2010. "Offshoring and Firm Performance: Evidence from French Manufacturing Industry," The World Economy, Wiley Blackwell, vol. 33(3), pages 507-524, March.
    4. Jeffrey M. Wooldridge, 2005. "Fixed-Effects and Related Estimators for Correlated Random-Coefficient and Treatment-Effect Panel Data Models," The Review of Economics and Statistics, MIT Press, vol. 87(2), pages 385-390, May.
    5. Paul Windrum & Andreas Reinstaller & Christopher Bull, 2009. "The outsourcing productivity paradox: total outsourcing, organisational innovation, and long run productivity growth," Journal of Evolutionary Economics, Springer, vol. 19(2), pages 197-229, April.
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    Cited by:

    1. Sari, Dyah Wulan & Restikasari, Wenny & Ajija, Shochrul Rohmatul & Tarbiyah Islamia, Haura Azzara & Muchtar, Darmawati, 2021. "The Impacts of Foreign Direct Investment and Export Expansion on the Performance of the High-Tech Manufacturing Industry," Jurnal Ekonomi Malaysia, Faculty of Economics and Business, Universiti Kebangsaan Malaysia, vol. 55(2), pages 91-105.

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    More about this item

    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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