Beyond the giants: The hidden role of micro and small enterprises in GVC reconfiguration dynamics
Journal of International Business Policy, 2025 - with Fabio Landini and Luigi TredicineLink: Article (Open Access)Abstract: This paper analyzes the determinants and consequences of reshoring decisions among micro and small enterprises (MSEs) in the Italian fashion industry during the period 2008–2015, marked by the introduction and implementation of “Made-in” policies. Using administrative firm-level data from the Italian Ministry of Economy and Finance Annual Survey, the study compares MSEs that reshored production with those maintaining offshore outsourcing strategies. Findings indicate reshoring predominantly occurs among firms with limited capability endowments, suggesting this strategy often functions as a corrective response to previous misjudgments rather than a proactive strategic decision. Furthermore, evidence shows that reshoring does not yield benefits for MSEs; instead, firms that reshore exhibit persistent underperformance compared to those that maintain offshore operations. However, this negative impact is partially offset when reshoring occurs in regions characterized by dense subcontracting networks, highlighting the crucial role of local production systems in mitigating the challenges faced by reshoring MSEs. These results question the effectiveness of broad-based reshoring incentives linked to Made-in policies, underscoring the necessity for targeted, context-specific policy interventions.Explaining the multifaceted patterns of migrant firms in the global economy: a resource-based approach
Interantional Journal of Entrepreneurial Behaviour and Research, 2025 - with Alessandro ArrighettiLink: Article (Open Access)Abstract: This article introduces a novel theoretical model aimed at categorizing in a unitary framework the migrant enterprise as an autonomous entity, providing a reliable explanation of the heterogeneous features and performances displayed by these firms in the global economy. The model is effective in explaining the multifaceted patterns of migrant businesses, even when they operate in similar socioeconomic settings and they are managed by entrepreneurs of the same ethnic background.Firm interconnectedness and resilience: evidence from the Italian manufacturing
Cambridge Journal of Regions, Economy and Society, 2024 - with Ibrahim Shaheen, Steven Brakman and Harry GarretsenLink: Article (Open Access)Abstract: This article explores how firm interconnectedness determines firm-level resilience. We argue that firms that engage in outward foreign direct investment are more interconnected, and therefore better equipped to deal with structural and economic shocks, than firms that are not engaged in outward foreign investment. Interconnectedness is measured along two dimensions; cross-border firm linkages and embeddedness in interconnected regions. We use a sample of 13,000 Italian manufacturing firms during the period 2008–2011. We find a positive association between firm interconnectedness and resilience. Moreover, we find the firms that operate in more interconnected regions to be more resilient than firms that operate in relatively isolated regions. Our results offer new insights into the complex interaction between firm and regional interconnectedness.Identifying and mapping industrial districts through a spatially constrained cluster-wise regression approach
Journal of Regional Science, 2024 - with Francesco Vidoli, Elisa Fusco and Nicoletta GiudiceLink: Article (Open Access)Abstract: The aim of this article is to exploit an innovative spatial econometric approach to map and study the evolving patterns ofindustrial districts (IDs). The procedure can be classified as a k‐means cluster‐wise regression procedure and is designed todetect homogeneous areas of subcontracting activity. These spatially contiguous aggregations of subcontractors are identified interms of production function homogeneity and are defined as spatial regimes. Using this procedure, it is possible to detect twoimportant sources of agglomeration economies that are commonly associated with the presence of an industrial district. Themethodology is tested on a sample of Italian micro and small‐sized subcontracting firms operating in the footwear industry,showing its effectiveness in identifying the most commonly known IDs in this sector. Most ID regimes are persistent over time,despite the high turnover rates in the local subcontracting population after the 2008 financial crisis. These results can beexplained by the presence of locally rooted competencies and context‐specific knowledge bases that persist despite the changingactors operating in the locality. Our evidence also shows that location in an ID does not necessarily entail benefits in terms ofperformance for subcontracting firms.Microfoundations of global value chain research: big decisions by small firms
Environment and Planning A, 2022 - with Giulio Buciuni and Gary GereffiLink: Article (Open Access)Abstract: In this study we introduce a unique longitudinal dataset from the Italian Ministry of Economy and Finance Annual Survey (IMEFAS) to assess how micro and small enterprises (MSEs) partake in the global economy by tapping into global value chains (GVCs). The results of the empirical analysis show that the great majority of MSEs are unable to establish direct links with GVCs. However, two sub-categories of subcontractors and branded producers were able to accomplish upgrading and partake in GVCs after the 2008 economic crisis. For both groups of firms, strategies implemented in domestic value chains contributed to their future participation in GVCs. By identifying small firms’ value chain decisions associated with their ability to access GVCs directly, this study sheds light on the microfoundations of GVCs. It paves the way for the future intersection of small business economics and GVCs, two areas of research that have seldom talked to each other.Reshoring by small firms: dual sourcing strategies and local subcontracting in value chains
Cambridge Journal of Regions, Economy and Society, 2022 - with Giulio Buciuni and Gary GereffiLink: Article (Open Access)Abstract: This article assesses how the reshoring of manufacturing activities by micro and small enterprises (MSEs) affects the performances of co-located subcontracting networks and the reconfiguration of global value chains (GVCs). We utilize quantitative microdata of Italian MSEs operating in the clothing and footwear industries during the 2008–2015 period.Empirically MSE reshoring does not have a significant impact on domestic subcontractors’ birth rates and survival chances, whereas it is positively associated with their productivity growth. Most MSEs in our sample adopt a dual sourcing strategy, expanding their global production networks while preserving their local supply base. Local and global production networks are not two alternative paradigms of industrial organization; they can be complementary and mutually reinforce each other.Formal cooperation and the performance of Italian firms operating inside and outside industrial districts
Regional Studies, 2022 - with Francesco VidoliLink: Article (Open Access)Abstract: This paper discusses the impact of formal cooperation on the performance of Italian firms operating inside and outside industrial districts (IDs). The analysis is focused on a policy tool (Contratti di Rete or network agreements) introduced in Italy to promote the use of non-equity alliances among smaller firms. We claim that the impact of both inward- and outward-looking partnerships is moderated by the local environment in which member firms are embedded. The results show that the benefits from the policy measure are more evident for outward-looking agreements that do not involve ID firms. Inside IDs, firms do not seem to be capable of reaping significant gains from the use of formal cooperation. From a policy perspective, our findings suggest that decision-makers should tailor their interventions to the features of the local economic environment, promoting strategies aimed at maximizing the outcomes of formal cooperation while accounting for geographical differences.Mimetic isomorphism, offshore outsourcing and backshoring decisions among Micro and Small Enterprises
Regional Studies, 2021 Link: Article (Open Access)Abstract: This paper exploits novel data on Italian manufacturing firms to investigate how mimetic isomorphism influences offshore outsourcing and backshoring decisions among micro and small enterprises (MSEs). The results show that offshore outsourcing by peers located in the same home region positively affects the likelihood that an MSE will engage in the same global sourcing strategy. When these dynamics emerge, firms are more likely to engage in long-lasting foreign subcontracting relationships. Mimetic isomorphism is only detected during the early stages of the internationalization process, while backshoring practices appear to be the result of more independent decisions.Investigating space‐time patterns of regional industrial resilience through a micro‐level approach: An application to the Italian wine industry
Journal of Regional Science, 2020 - with Francesco Vidoli Link: https://doi.org/10.1111/jors.12480 Abstract: This paper introduces a new methodology to identify space-time patterns of regional resilience using a micro‐level approach. The novel empirical tool combines geographically weighted regression with panel stochastic frontier analysis with endogenous covariates. The analysis is implemented on a panel of farm holdings operating in the Italian wine industry, focusing on the impact of a major institutional change. The results show the effectiveness of the new procedure in identifying geographical clusters of wine producers who reacted to the shock in similar ways. The responses are found to be homogeneous within specific territories and heterogeneous between regions.Outward foreign direct investment, offshore outsourcing and local network resilience in industrial districts
European Planning Studies, 2017Link: http://dx.doi.org/10.1080/09654313.2016.1257568Abstract: The internationalization of production activities is having a profound impact on regional economies. In this regard, it is generating externalities not only in the countries where production is offshored, but also in the domestic networks in which the internationalizing firms are located. Therefore, this paper investigates the effects of outward foreign direct investment and offshore outsourcing activities on domestic supplier populations in industrial districts (IDs). The aim is to evaluate the ability of these systems to react to the structural shocks associated with internationalization strategies. The results show that local network resilience is generally higher in advanced forms of IDs, where the role of large firms or service activities is more relevant.Same same, but different: the heterogeneous nature of subcontractors inside Italian industrial districts
Entrepreneurship and Regional Develpoment, 2017 - with Paolo Pavone and Saverio Testa Link: http://dx.doi.org/10.1080/08985626.2017.1350886Abstract: This paper investigates the structural features and performances of small firms interacting inside regional production networks, with particular regard to Italian industrial districts specialized in footwear production. A typological classification of the various participants in the supply chains is introduced and used to interpret the performances of the main groups identified, focusing on a five-year period following the 2008 financial crisis. The empirical investigation is conducted using an innovative archive containing detailed information on a large share of Italian micro and small firms that are generally excluded from most firm-level databases. The results show that, inside industrial districts, subcontractors are best described as a set of heterogeneous agents with distinct identities and idiosyncratic approaches to the market. The most widely diffused type of supplier still retains most of the structural characteristics traditionally described by the literature. However, industrial districts are also characterized by the presence of advanced forms of subcontractors whose organizational structure differs from that of a traditional supplier: in fact, such producers share more commonalities with end product firms. The analysis of the performances indicates that advanced subcontractors displayed better results during the period 2008–2012, while traditional suppliers tend to occupy a peripheral position in most subcontracting networks.Migrant entrepreneurs and local networks in industrial districts
Research Policy, 2016Link: http://dx.doi.org/10.1016/j.respol.2016.05.006Abstract: Migrant firms are increasing in local manufacturing systems. Their presence is expected to generate bene-ficial effects in host regions by stimulating trade flows and knowledge diffusion. However, the opportunityfor migrant entrepreneurs to prosper depends on their ability to establish linkages with the local firmnetworks. Using an innovative database on Italian micro and small businesses, this paper investigates theperformance of a sample of migrant and indigenous firms, providing evidence of a significant gap. Theresults suggest that manufacturing systems that exclude migrant firms are missing a key opportunity tointegrate a valuable source of diversity.Mapping the Multifaceted Patterns of Industrial Districts: A New Empirical Procedure with Application to Italian Data
Regional Studies, 2016 - with Paolo Pavone Link: http://dx.doi.org/10.1080/00343404.2015.1011611Abstract: This paper illustrates an innovative algorithm to map and classify industrial districts. The theoretical framework uses the Sforzi procedure as a basis for the analysis, revising the main criteria proposed by the original approach. The methodology is tested on the 2001 Italian Census of Industry and Services to allow comparison between the two algorithms. The results show the effectiveness of the new method in identifying industrial districts, without causing distortions to the original framework. The classification proposed allows one to discriminate the areas identified by the procedure according to their structural characteristics, contributing to the unveiling of the diversity underlying the industrial district phenomenon.Controlling for spatial heterogeneity in non-parametric efficiency models: An empirical proposal
European Journal of Operational Research, 2016 - with Francesco Vidoli Link: http://dx.doi.org/10.1016/j.ejor.2015.10.050Abstract: This paper introduces an original methodology, derived by the robust ordermmodel, to estimate technical efficiency with spatial autocorrelated data using a nonparametric approach. The methodology is aimed to identify potential competitors on a subset of productive units that are identified through spatial dependence,thus focusing on peers located in close proximity of the productive unit. The proposed method is illustrated in a simulation setting that verifies the territorial differences between the non parametric unconditioned and the conditioned estimates. A firm-level application to the Italian industrial districts is proposed in order to highlight the ability of the new method to separate the global intangible spatial effect from the efficiency term on real data.Spatial nonstationarity in the stochastic frontier model: An application to the Italian wine industry
Regional Science and Urban Economics - with Francesco Vidoli, Concetta Cardillo and Elisa Fusco Link: http://dx.doi.org/10.1016/j.regsciurbeco.2016.10.003Abstract: This research estimates the efficiency of a representative sample of Italian wine producers from the Italian FADN survey following a recent spatial stochastic frontier framework that allows to isolate the spatial dependence among units and to evaluate the role of intangible local factors in influencing the economicperformance of firms. The empirical exercise shows that the specific territorial patterns in the data cannot be merely explained using a standard set of contextual factors. This intangible component can be interpreted as the role of the local business climate: in most localities, the presence of an embedded community stimulates a process of local learning that generates the diffusion of tacit knowledge through continuous interaction among the local actors. This effect is found to be different across firm size, with a larger impact on small firms.A non-parametric stochastic frontier for the analysis of labour-use efficiency in the Italian machinery industry
QsS, 2014 - with Arianna Campagna, Giancarlo Ferrara and Francesco Vidolihttps://mpra.ub.uni-muenchen.de/94359/1/MPRA_paper_94359.pdfAbstract: Firms' efficiency is a mainstream in the study of economic growth. Within this broad research area, the present work, conducted as part of the research activities of SOSE S.p.A., analyses the labour-use efficiency in the Italian machinery industry through the application of a non-parametric stochastic frontier model with the aim of suggesting new insights to better understand the recent dynamics of the Italian manufacturing system. An extended panel data of manufacturing Small and Medium Enterprises (SMEs) operating in the mechanical industry for the period 2002-2012 has been extracted (in anonymous form) from the Italian Ministry of Economy and Finance annual survey and used for the implementation of the proposed method. Results show the presence of a persistent level of labour-use inefficiency in the sample used for the analysis: this issue is particularly evident for the subset of firms using non standard jobs, while firms entitled to access to wage redundancy fund appear to have achieved higher levels of efficiency in labour input use on average. The analysis also shows that the inefficiency gap between the two subsets of firms tends to reduce in absolute terms over time.