Supply Chains and the Internalization of SMEs: Evidence from Italy

Giorgia Giovannetti (), Enrico Marvasi and Marco Sanfilippo

No 2014/62, RSCAS Working Papers from European University Institute

Abstract: 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.

Keywords: Supply Chains; SMEs; Heterogeneous firms; Internationalization (search for similar items in EconPapers)
JEL-codes: F12 F14 F21 (search for similar items in EconPapers)
Date: 2014-05
New Economics Papers: this item is included in nep-cse, nep-eur and nep-int
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

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Related works:
Working Paper: Supply Chains and the Internalization of SMEs: Evidence from Italy (2013)
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