European University Institute Library

Supply chains and the internalization of SMEs, evidence from Italy, Giorgia Giovannetti, Enrico Marvasi, Marco Sanfilippo

eng

This paper explores the impact of being part of a supply chain on the internationalization of firms. We show that even small and less productive firms, if involved in production chains, can take advantage of reduced costs of entry and economies of scale that enhance their probability to become exporters. The empirical analysis is carried out on an original database, obtained by merging and matching balance sheet data with data from a survey on over 25,000 Italian firms, largely SMEs, which include direct information on the involvement in supply chains. We find a positive and significant impact of being part of a supply chain on the probability to export and on the intensive margin of trade. The number of foreign markets served (the extensive margin), on the other hand, does not seem to be affected. We also investigate whether being in different positions along the chain, i.e. upstream or downstream, matters and we find that downstream producers tend to benefit more. Our results are robust to different specifications, estimation methods, and to the inclusion of the control variables typically used in heterogeneous firm models

Includes bibliographical references

no index present

non fiction

Supply chains and the internalization of SMEs

914479000

Giorgia Giovannetti, Enrico Marvasi, Marco Sanfilippo

EUI working papers. RSC, 2014/62EUI papersGlobal Governance Programme, 111

evidence from Italy