Firm Productivity, Organizational Choice and Global Value Chain
Jeffrey B. Nugent
Based upon insights of the global value chain literature, the aim of this paper is to investigate the impact of being a supplier firm on labour productivity. The country of analysis is Italy, historically characterized by a very strong division of labour among firms. We make use of a unique database, which collects information on several organizational, structural and performance variables of a representative sample of more than 3000 Italian manufacturing firms, spanning the period 1998-2006. Our econometric investigation confirms predictions coming from the global value chain literature. By and large, our findings indicate that being a traditional supplier is associated with lower levels of productivity in comparison with the ones exhibit by final firms. However, supplier firms that both export a significant percentage of their production and carry out product or process innovations (i.e. the subset of suppliers that we name advanced suppliers against traditional suppliers) display productivity levels not lower (and, actually, higher) than final firms ones.