Research in progress

When Small Clients Go Global: GVC Sourcing Strategies and Local Supplier Performance

with Nicoletta Giudice - revise and resubmit, Small Business Economics

Abstract: The aim of this article is to assess how global sourcing strategies by small client firms affect suppliers operating in the same domestic region. The analysis exploits unique data on Italian Micro and Small Enterprises (MSEs) operating in the clothing and footwear industry. The results show that offshore outsourcing decisions by MSEs are correlated with higher survival rates among neighbouring suppliers and do not generate significant incentives to upgrade business strategies. Our findings suggest that offshore outsourcing is not necessarily associated with displacement effects, and that local buyer-supplier relationships among MSEs are stickier than those established by larger firms.

Immigrant entrepreneurship in Europe: a comparative empirical approach

with Riccardo Rinaldi, Andrea Lasagni and Alessandro Arrighetti - Revise and resubmit, Journal of Industrial and Business Economics

Abstract: The aim of this paper is to use a multi-country approach to assess the role played by individual characteristics and local labor market conditions in influencing migrants’ self-employment decisions. The empirical investigation exploits data from the EU Labor Force Survey for the 2005-2016 period and focuses on two countries (Italy and the UK) characterized by significantly different labor market dynamics. Our findings suggest that the impact of individual characteristics is similar across countries, whereas the role of the local economic environment changes significantly, resulting in different migrant entrepreneurship patterns. These findings appear to be consistent with the most recent strand of literature, suggesting that while individual characteristics of self-employed migrants are similar across countries, national and regional differences play a key role in determining migrants’ entrepreneurial propensity.
Working paper available here:
https://www.econstor.eu/bitstream/10419/270873/1/immigrantentrepreneurship_econstor.pdf

From Intra-region to Inter-region: A New Method to Operationalize Resilience

with Ibrahim Shaheen, Steven Brakman and Harry Garretsen

Abstract: Resilience is proven to be relevant for regional development due to the far-reaching implications of crises. Heretofore, scholars have done an intensive work on the conceptual clarity and the determinants of regional resilience, whereas less attention has been paid to the operationalization of this concept. When measuring regional resilience, the conventional practice is to compare pre- and post-shock performances of the target region. We argue that such an approach could be misleading when the shock moves the economic system far away from its previous development path. In this paper, we rethink the way regional resilience is measured. Our method to operationalize resilience is conceptually different from previous work in that we use an inter-regional rather than an intra-regional perspective. Instead of comparing the region’s present to its past, we focus on the post-shock period and compare the target region’s performance to the average performance of a group of comparable regions (peers). We expect such an approach to provide deeper insights on the ability of a territory to withstand and recover after a sudden economic shock. We rely on cluster analysis to identify groups of homogeneous regions. The reliability of the proposed method is tested using a sample of European regions in the context of the great recession of 2008/09. The main finding of the empirical exercise is that resilience outcomes are considerably affected by the empirical method used.

Regional Interconnectedness and resilience

with Ibrahim Shaheen, Steven Brakman and Harry Garretsen

Abstract: The integration of today’s world is greater than ever, which carries huge potential for regional economics as well as huge risks of the adverse effect of sudden shocks. There exists a well-established empirical evidence on the relevance of region-specific characteristics for regional resilience to recessionary shocks. However, a very scant treatment of the role of regional interconnectedness can be found in the literature. In this paper, we investigate the relevance of regional interconnectedness to the heterogeneous response of regional economies in the context of the great recession of 2008/09. In order to capture regional interconnectedness, we rely on proximity, market access, labor movements (migration), and goods movements (regional trade). We conduct a panel data analysis for a sample of NUTS2 European regions to quantify the impact of those factors on regional resilience. We also adopt a new measure of regional resilience that differs significantly from previous work. Our main findings suggest that the more interconnected a region is in terms of a more proximity to urban agglomeration centers, a better market access, a higher share of immigrants and more trade flows, the higher the resilience that region exhibits against recessionary shocks. Our contribution in this paper allows for a more complete picture of resilience determinants.

Regional Windows of Opportunity in GVCs: The Impact of Inward FDI on Small Subcontractors’ Upgrading

with Gianluca Capone and Cristina Re

Abstract: This study investigates how the entry and exit of foreign multinational enterprises (MNEs) generate local windows of opportunity for subcontractors in the Italian fashion industry, influencing their upgrading trajectories. Using firm-level data on small subcontractors, we distinguish four dimensions of upgrading: engagement in higher value-added activities, diversification of client and activity portfolios, and the shift from component toward final goods production. The results show that the entry of foreign MNEs does not generate significant local upgrading opportunities. Conversely, MNE exits significantly foster upgrading, but only for subcontractors embedded in industrial districts and linked to clients beyond their regional boundaries.

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