Value chain, regional institutions and firm growth in Europe

Giulio Cainelli, Roberto Ganau and Anna Giunta

Journal of Economic Geography, 2023, vol. 23, issue 4, 745-770

Abstract: We analyse whether and to what extent the quality of regional institutions has a differential effect on firms’ growth driven by heterogeneity in firm value chain positioning. We analyse turnover growth during the period 2010–2013 for a sample of manufacturing firms located in four European countries—France, Germany, Italy and Spain. We distinguish final firms serving end markets from suppliers serving other firms. Our instrumental variable estimates point to high-quality regional institutions enhancing the growth performance of only locally embedded suppliers with operations confined to the own regional market—that is, the ‘weakest’ node of the value chain.

Keywords: Regional institutions; value chain positioning; firm growth; Europe (search for similar items in EconPapers)
JEL-codes: D22 F61 H41 R5 (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:oup:jecgeo:v:23:y:2023:i:4:p:745-770.

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