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Connections and Competences in the Governance of the Value Chain. How Industrial Countries Keep their Competitive Power

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  • Paolo Crestanello
  • Giuseppe Tattara

Abstract

As European firms have faced strong competition from businesses in other industrial economies, in order to reduce production costs and keep prices competitive they have begun outsourcing their production to low wage countries. Although final firms have taken clear advantage from outsourcing abroad and their profit, after delocalization, have systematically increased, the question regarding the possible impoverishment of the outsourcing territory is nonetheless pertinent. The aim of the paper is to analyze the governance of the value chain operating in the traditional sectors of textile, clothing and shoe, pointing particularly to delocalization through sub-contracting. The case studied deals with Veneto firm relations with Romania. As the result of the analyses, the authors are in the opinion that a rapid outsourcing process has profoundly affected the structure of production in both territories in the last decade.

Suggested Citation

  • Paolo Crestanello & Giuseppe Tattara, 2006. "Connections and Competences in the Governance of the Value Chain. How Industrial Countries Keep their Competitive Power," The Other Canon Foundation and Tallinn University of Technology Working Papers in Technology Governance and Economic Dynamics 07, TUT Ragnar Nurkse Department of Innovation and Governance.
    • Handle: RePEc:tth:wpaper:07
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