Productivity, Competitiveness, and Territories of the Italian Medium-Sized Companies

Fulvio Coltorti and Daniela Venanzi

International Journal of Economics and Finance, 2017, vol. 9, issue 12, 86-100

Abstract: The medium-sized firms (MEs) are the cutting-edge of the Italian manufacturing sector. They have a crucial role in influencing the behavior of the local systems whose they are part (2/3 of the total firms are located in industrial districts). This study investigates the drivers of Italian MEs¡¯ productivity, a fundamental aspect for assessing their ability to compete successfully. The classical approach (i.e. TFP) in measuring productivity is inapplicable to MEs, whose business model is characterized by: i) specialized production at the leading technological edge; ii) organization based on vertical and horizontal supply chains, where the major players are small companies, specialized on single production phase; iii) marketing strategy focused on market niches, which are created/dominated thanks to product differentiation and continuous innovation and where MEs impose premium prices. The empirical evidence shows that: i) the RTS are not constant, but decreasing and size and productivity are inversely related; ii) the quality of the workforce is the major driver of productivity: companies that employ a low-salary workforce are less productive than those that use more skilled and costlier workers; iii) territories matter: knowledge-intensive service firms as well as infrastructures and managerial skills have a positive impact on productivity.

Keywords: drivers of productivity; TFP; industrial districts; impact of territories on productivity; Italian medium-sized firms (search for similar items in EconPapers)
Date: 2017
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Persistent link: https://EconPapers.repec.org/RePEc:ibn:ijefaa:v:9:y:2017:i:12:p:86-100

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