IDEAS home Printed from https://ideas.repec.org/a/taf/indinn/v23y2016i5p407-425.html
   My bibliography  Save this article

From outsourcing to productivity, passing through training: microeconometric evidence from Italy

Author

Listed:
  • Roberto Antonietti

Abstract

This paper provides firm-level evidence on the short-run link between outsourcing and productivity using an original data-set of Italian manufacturing firms and estimating a recursive system of three equations. We find a positive correlation between productivity and outsourcing only if firms provide training for the workforce. This indirect impact is significant only in the case of production outsourcing and when training is provided off the job to top and middle managers. The rationale is that production outsourcing induces a re-organization of the production process requiring workers to learn and adapt through formal training activities.

Suggested Citation

  • Roberto Antonietti, 2016. "From outsourcing to productivity, passing through training: microeconometric evidence from Italy," Industry and Innovation, Taylor & Francis Journals, vol. 23(5), pages 407-425, July.
    • Handle: RePEc:taf:indinn:v:23:y:2016:i:5:p:407-425
    DOI: 10.1080/13662716.2016.1139444
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/13662716.2016.1139444
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/13662716.2016.1139444?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Tomiura, Eiichi, 2005. "Foreign outsourcing and firm-level characteristics: Evidence from Japanese manufacturers," Journal of the Japanese and International Economies, Elsevier, vol. 19(2), pages 255-271, June.
    2. Holl, Adelheid, 2008. "Production subcontracting and location," Regional Science and Urban Economics, Elsevier, vol. 38(3), pages 299-309, May.
    3. Egger, Peter & Pfaffermayr, Michael & Wolfmayr-Schnitzer, Yvonne, 2001. "The international fragmentation of Austrian manufacturing: The effects of outsourcing on productivity and wages," The North American Journal of Economics and Finance, Elsevier, vol. 12(3), pages 257-272, November.
    4. G. M.P. Swann, 2009. "The Economics of Innovation," Books, Edward Elgar Publishing, number 13211.
    5. Piva, Mariacristina & Santarelli, Enrico & Vivarelli, Marco, 2005. "The skill bias effect of technological and organisational change: Evidence and policy implications," Research Policy, Elsevier, vol. 34(2), pages 141-157, March.
    6. Lorraine Dearden & Howard Reed & John Van Reenen, 2006. "The Impact of Training on Productivity and Wages: Evidence from British Panel Data," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 68(4), pages 397-421, August.
    7. Fixler, Dennis J. & Siegel, Donald, 1999. "Outsourcing and productivity growth in services," Structural Change and Economic Dynamics, Elsevier, vol. 10(2), pages 177-194, June.
    8. F. Daveri & C. Jona-Lasinio, 2007. "Off-shoring and productivity growth in the Italian manufacturing industries," Economics Department Working Papers 2007-EP08, Department of Economics, Parma University (Italy).
    9. repec:dau:papers:123456789/10093 is not listed on IDEAS
    10. Gorg, Holger & Hanley, Aoife, 2005. "International outsourcing and productivity: evidence from the Irish electronics industry," The North American Journal of Economics and Finance, Elsevier, vol. 16(2), pages 255-269, August.
    11. Hartmut Egger & Peter Egger, 2006. "International Outsourcing and the Productivity of Low-Skilled Labor in the EU," Economic Inquiry, Western Economic Association International, vol. 44(1), pages 98-108, January.
    12. Mary Amiti & Shang‐Jin Wei, 2009. "Service Offshoring and Productivity: Evidence from the US," The World Economy, Wiley Blackwell, vol. 32(2), pages 203-220, February.
    13. Antonioli, Davide & Manzalini, Rocco & Pini, Paolo, 2011. "Innovation, workers skills and industrial relations: Empirical evidence from firm-level Italian data," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 40(3), pages 312-326, May.
    14. Giorgio Brunello & Pietro Garibaldi & Etienne Wasmer, 2007. "Education and training in Europe," SciencePo Working papers Main hal-03415950, HAL.
    15. Thijs Raa & Edward Wolff, 2001. "Outsourcing of Services and the Productivity Recovery in U.S. Manufacturing in the 1980s and 1990s," Journal of Productivity Analysis, Springer, vol. 16(2), pages 149-165, September.
    16. Bruno Crepon & Emmanuel Duguet & Jacques Mairesse, 1998. "Research, Innovation And Productivity: An Econometric Analysis At The Firm Level," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 7(2), pages 115-158.
    17. Roberto Antonietti & Giulio Cainelli, 2008. "Production Outsourcing, Organizational Governance and Firm’s Technological Performance: Evidence from Italy," The IUP Journal of Managerial Economics, IUP Publications, vol. 0(1), pages 51-69, February.
    18. Giuseppe Calabrese & Fabrizio Erbetta, 2005. "Outsourcing and firm performance: evidence from Italian automotive suppliers," International Journal of Automotive Technology and Management, Inderscience Enterprises Ltd, vol. 5(4), pages 461-479.
    19. Mol, Michael J. & Pauwels, Pieter & Matthyssens, Paul & Quintens, Lieven, 2004. "A technological contingency perspective on the depth and scope of international outsourcing," Journal of International Management, Elsevier, vol. 10(2), pages 287-305.
    20. Almeida, Rita & Carneiro, Pedro, 2009. "The return to firm investments in human capital," Labour Economics, Elsevier, vol. 16(1), pages 97-106, January.
    21. Roberto Antonietti & Maria Rosaria Ferrante & Riccardo Leoncini, 2014. "Spatial Agglomeration, Production Technology and the Choice to Make and/or Buy: Empirical Evidence from the Emilia Romagna Machine Tool Industry," Regional Studies, Taylor & Francis Journals, vol. 48(2), pages 284-300, February.
    22. Eve Caroli & John Van Reenen, 2001. "Skill-Biased Organizational Change? Evidence from A Panel of British and French Establishments," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 116(4), pages 1449-1492.
    23. Gilberto Antonelli & Roberto Antonietti & Giovanni Guidetti, 2010. "Organizational Change, Skill Formation, Human Capital Measurement: Evidence From Italian Manufacturing Firms," Journal of Economic Surveys, Wiley Blackwell, vol. 24(2), pages 206-247, April.
    24. repec:dau:papers:123456789/10054 is not listed on IDEAS
    25. Abraham, Katharine G & Taylor, Susan K, 1996. "Firms' Use of Outside Contractors: Theory and Evidence," Journal of Labor Economics, University of Chicago Press, vol. 14(3), pages 394-424, July.
    26. Heckman, James J, 1978. "Dummy Endogenous Variables in a Simultaneous Equation System," Econometrica, Econometric Society, vol. 46(4), pages 931-959, July.
    27. Alessia Lo Turco, 2007. "International Outsourcing and Productivity in Italian Manufacturing Sectors," Rivista italiana degli economisti, Società editrice il Mulino, issue 1, pages 125-146.
    28. Heinz Hollenstein & Tobias Stucki, 2012. "The 'New Firm Paradigm' and the Provision of Training: The Impact of ICT, Workplace Organization and Human Capital," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 148(IV), pages 557-595, December.
    29. 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.
    30. Timothy F. Bresnahan & Erik Brynjolfsson & Lorin M. Hitt, 2002. "Information Technology, Workplace Organization, and the Demand for Skilled Labor: Firm-Level Evidence," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 117(1), pages 339-376.
    31. Marian Murphy, 2002. "Organisational Change and Firm Performance," OECD Science, Technology and Industry Working Papers 2002/14, OECD Publishing.
    32. Ono, Yukako, 2007. "Market thickness and outsourcing services," Regional Science and Urban Economics, Elsevier, vol. 37(2), pages 220-238, March.
    33. Caroli, Eve & Greenan, Nathalie & Guellec, Dominique, 2001. "Organizational Change and Skill Accumulation," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 10(2), pages 481-506, June.
    34. Wim Groot, 1999. "Productivity effects of enterprise-related training," Applied Economics Letters, Taylor & Francis Journals, vol. 6(6), pages 369-371.
    35. Giulio Cainelli & Donato Iacobucci, 2012. "Agglomeration, Related Variety, and Vertical Integration," Economic Geography, Taylor & Francis Journals, vol. 88(3), pages 255-277, July.
    36. Karsten Bjerring Olsen, 2006. "Productivity Impacts of Offshoring and Outsourcing: A Review," OECD Science, Technology and Industry Working Papers 2006/1, OECD Publishing.
    37. Amemiya, Takeshi, 1978. "The Estimation of a Simultaneous Equation Generalized Probit Model," Econometrica, Econometric Society, vol. 46(5), pages 1193-1205, September.
    38. Massimiliano Mazzanti & Sandro Montresor & Paolo Pini, 2009. "What Drives (or Hampers) Outsourcing? Evidence for a Local Production System in Emilia Romagna," Industry and Innovation, Taylor & Francis Journals, vol. 16(3), pages 331-365.
    39. Giulio Cainelli & Donato Iacobucci, 2012. "Agglomeration, Related Variety, and Vertical Integration," Economic Geography, Clark University, vol. 88(3), pages 255-277, July.
    40. Brusco, Sebastiano, 1982. "The Emilian Model: Productive Decentralisation and Social Integration," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 6(2), pages 167-184, June.
    41. Daria Ciriaci, 2011. "Intangible resources: the relevance of training for European firms innovative performance," JRC Working Papers on Corporate R&D and Innovation 2011-06, Joint Research Centre.
    42. repec:dau:papers:123456789/10092 is not listed on IDEAS
    43. Almas Heshmati, 2003. "Productivity Growth, Efficiency and Outsourcing in Manufacturing and Service Industries," Journal of Economic Surveys, Wiley Blackwell, vol. 17(1), pages 79-112, February.
    44. Bassanini, Andrea & Booth, Alison L. & Brunello, Giorgio & De Paola, Maria & Leuven, Edwin, 2005. "Workplace Training in Europe," IZA Discussion Papers 1640, Institute of Labor Economics (IZA).
    45. Bernd Görzig & Andreas Stephan, 2002. "Outsourcing and Firm-level Performance," Discussion Papers of DIW Berlin 309, DIW Berlin, German Institute for Economic Research.
    46. Erik Brynjolfsson & Lorin M. Hitt, 2000. "Beyond Computation: Information Technology, Organizational Transformation and Business Performance," Journal of Economic Perspectives, American Economic Association, vol. 14(4), pages 23-48, Fall.
    47. Omar M. G. Keshk, 2003. "CDSIMEQ: A program to implement two-stage probit least squares," Stata Journal, StataCorp LP, vol. 3(2), pages 157-167, June.
    48. Miozzo, Marcela & Grimshaw, Damian, 2005. "Modularity and innovation in knowledge-intensive business services: IT outsourcing in Germany and the UK," Research Policy, Elsevier, vol. 34(9), pages 1419-1439, November.
    49. Pascal Petit & Luc Soete (ed.), 2001. "Technology and the Future of European Employment," Books, Edward Elgar Publishing, number 2188.
    50. Francesco Daveri & Cecilia Jona-Lasinio, 2008. "Off-shoring and Productivity Growth in the Italian Manufacturing Industries -super-‡," CESifo Economic Studies, CESifo Group, vol. 54(3), pages 414-450, September.
    51. Fan, Joseph P. H., 2000. "Price uncertainty and vertical integration: an examination of petrochemical firms," Journal of Corporate Finance, Elsevier, vol. 6(4), pages 345-376, December.
    52. Lars Bengtsson & Mandar Dabhilkar, 2009. "Manufacturing outsourcing and its effect on plant performance—lessons for KIBS outsourcing," Journal of Evolutionary Economics, Springer, vol. 19(2), pages 231-257, April.
    53. Guidetti, Giovanni & Mazzanti, Massimiliano, 2007. "Firm-level training in local economic systems: Complementarities in production and firm innovation strategies," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 36(6), pages 875-894, December.
    54. Sandro Montresor & Davide Antonioli & Massimiliano Mazzanti & Paolo Pini, 2009. "Outsourcing and firm productivity: evidence for an Italian local production system," Openloc Working Papers 0907, Public policies and local development.
    55. Conti, Gabriella, 2005. "Training, productivity and wages in Italy," Labour Economics, Elsevier, vol. 12(4), pages 557-576, August.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Samson Ige Abolarinwa & Cosmas Ikechukwu Asogwa & Osmund Chinweoda Ugwu & Samuel Adedoyin & Anthonia Uju Uzuagu & Vitalis Chinedu Ndu, 2023. "Human Capital Development and Performance in Garment Industries in Nigeria: Business Owners and Employees Simultaneous Development Perspectives," SAGE Open, , vol. 13(4), pages 21582440231, December.
    2. Caroline Stiel, 2017. "Modern Public Enterprises: Organisational Innovation and Productivity," Discussion Papers of DIW Berlin 1713, DIW Berlin, German Institute for Economic Research.
    3. Saibal Kar & Meghna Dutta, 2018. "Outsourcing and Productivity During Economic Crisis: Evidence from Indian Manufacturing Firms," Arthaniti: Journal of Economic Theory and Practice, , vol. 17(2), pages 168-182, December.
    4. Bojana Sokolović & Iva Šiđanin & Ljubica Duđak & Sonja Kokotović, 2023. "Professional Training of Employees in Media Organizations in Serbia and Its Implications on Career Development," Sustainability, MDPI, vol. 15(5), pages 1-28, February.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Davide Antonioli & Massimiliano Mazzanti & Sandro Montresor & Paolo Pini, 2015. "Outsourcing and Firm Productivity in a Specific Local Production System: Evidence from Reggio Emilia (Italy)," Growth and Change, Wiley Blackwell, vol. 46(2), pages 292-320, June.
    2. Maliranta, Mika & Asplund, Rita, 2007. "Training and Hiring Strategies to Improve Firm Performance," Discussion Papers 1105, The Research Institute of the Finnish Economy.
    3. Ohnemus, Jörg, 2007. "Does IT Outsourcing Increase Firm Success? An Empirical Assessment using Firm-Level Data," ZEW Discussion Papers 07-087, ZEW - Leibniz Centre for European Economic Research.
    4. Roberto Antonietti & Maria Rosaria Ferrante & Riccardo Leoncini, 2016. "Local market size, social capital and outsourcing: evidence from Emilia Romagna," Small Business Economics, Springer, vol. 47(1), pages 243-260, June.
    5. Roberto Antonietti & Maria Rosaria Ferrante & Riccardo Leoncini, 2014. "Trust your neighbour. Industrial relatedness, social capital and outsourcing," Papers in Evolutionary Economic Geography (PEEG) 1403, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Jan 2014.
    6. Antonietti, Roberto & Cainelli, Giulio & Lupi, Claudio, 2013. "Vertical disintegration and spatial co-localization: The case of Kibs in the metropolitan region of Milan," Economics Letters, Elsevier, vol. 118(2), pages 360-363.
    7. Charlie Karlsson & Urban Gråsjö & Sofia Wixe (ed.), 2015. "Innovation and Entrepreneurship in the Global Economy," Books, Edward Elgar Publishing, number 15906.
    8. Ohnemus, Jörg, 2009. "Productivity effects of business process outsourcing: a firm-level investigation based on panel data," ZEW Discussion Papers 09-088, ZEW - Leibniz Centre for European Economic Research.
    9. Roberto Antonietti & Maria Rosaria Ferrante & Riccardo Leoncini, 2015. "Infrastructure endowment, social capital and outsourcing: evidence from Emilia Romagna, Italy," Chapters, in: Charlie Karlsson & Urban Gråsjö & Sofia Wixe (ed.), Innovation and Entrepreneurship in the Global Economy, chapter 13, pages 310-330, Edward Elgar Publishing.
    10. Giulio Pedrini, 2017. "Law and economics of training: a taxonomy of the main legal and institutional tools addressing suboptimal investments in human capital development," European Journal of Law and Economics, Springer, vol. 43(1), pages 83-105, February.
    11. John S Heywood & Uwe Jirjahn & Annika Pfister, 2020. "Product market competition and employer provided training in Germany," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 29(2), pages 533-556.
    12. Dario Guarascio & Mario Pianta & Matteo Lucchese & Francesco Bogliacino, 2015. "Business cycles, technology and exports," Economia Politica: Journal of Analytical and Institutional Economics, Springer;Fondazione Edison, vol. 32(2), pages 167-200, August.
    13. Rinaldo Evangelista & Maria Savona, 2010. "Innovation and Employment in Services," Chapters, in: Faïz Gallouj & Faridah Djellal (ed.), The Handbook of Innovation and Services, chapter 16, Edward Elgar Publishing.
    14. Alberto López, 2014. "Outsourcing and firm productivity: a production function approach," Empirical Economics, Springer, vol. 47(3), pages 977-998, November.
    15. Martin Borowiecki & Bernhard Dachs & Doris Hanzl-Weiss & Steffen Kinkel & Johannes Pöschl & Magdolna Sass & Thomas Christian Schmall & Robert Stehrer & Andrea Szalavetz, 2012. "Global Value Chains and the EU Industry," wiiw Research Reports 383, The Vienna Institute for International Economic Studies, wiiw.
    16. Daria Ciriaci, 2011. "Intangible resources: the relevance of training for European firms innovative performance," JRC Working Papers on Corporate R&D and Innovation 2011-06, Joint Research Centre.
    17. Fibla Gasparín, Ma. Teresa, 2010. "Productivity in southern European small firms: When and how work organization complements process innovation," Working Papers 2072/179600, Universitat Rovira i Virgili, Department of Economics.
    18. Annika Campaner & John S. Heywood & Uwe Jirjahn, 2022. "Flexible work organization and employer provided training: Evidence from German linked employer‐employee data," Kyklos, Wiley Blackwell, vol. 75(1), pages 3-29, February.
    19. Piva, Mariacristina & Santarelli, Enrico & Vivarelli, Marco, 2005. "The skill bias effect of technological and organisational change: Evidence and policy implications," Research Policy, Elsevier, vol. 34(2), pages 141-157, March.
    20. Lukasz Arendt & Wojciech Grabowski, 2017. "Innovations, ICT and ICT-driven labour productivity in Poland," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 25(4), pages 723-758, October.

    More about this item

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • L24 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Contracting Out; Joint Ventures
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:indinn:v:23:y:2016:i:5:p:407-425. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/CIAI20 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.