Spatial Agglomeration, Technology and Outsourcing of Knowledge Intensive Business Services - Empirical Insights from Italy

31 Pages Posted: 1 Aug 2007

See all articles by Roberto Antonietti

Roberto Antonietti

University of Padova - "Marco Fanno" Department of Economics and Management

Giulio Cainelli

Università degli Studi di Bari - Dipartimento per lo Studio delle Societa Mediterranee; CERIS-CNR

Date Written: July 2007

Abstract

Aim of this paper is to explore the main drivers of outsourcing of knowledge intensive business services by Italian manufacturing firms. While anecdotal and empirical evidence has emphasized labour cost and scale economies as behind firms' choices to outsource production or service activities, here we focus on spatial agglomeration and technology as important factors. Using microeconomic data on a repeated cross-section of Italian manufacturing firms for the period 1998-2003, we develop a two-stage model in order to avoid selection bias: first, we estimate the determinants of the firm's decision to outsource business-related services; second, we estimate the main factors underlying the intensity and complexity of KIBS outsourcing, expressed by the number of service activities that are externalized. Our results show that labour cost-savings are not relevant in driving the decision to outsource KIBS, but ICT, R&D and location within a dense and technologically developed industrial district have very positive effects.

Keywords: KIBS, Service Outsourcing, R&D, ICT, Spatial Agglomeration

JEL Classification: L24, L84, R32, R12

Suggested Citation

Antonietti, Roberto and Cainelli, Giulio, Spatial Agglomeration, Technology and Outsourcing of Knowledge Intensive Business Services - Empirical Insights from Italy (July 2007). FEEM Working Paper No. 79.2007, Available at SSRN: https://ssrn.com/abstract=1003791 or http://dx.doi.org/10.2139/ssrn.1003791

Roberto Antonietti (Contact Author)

University of Padova - "Marco Fanno" Department of Economics and Management ( email )

via Del Santo 33
Padova, PD 35123
Italy
+390498271508 (Phone)
+390498274211 (Fax)

HOME PAGE: http://www.economia.unipd.it/category/ruoli/personale-docente?key=4FD07667CE6DC0DA28DDD61A73393A5F

Giulio Cainelli

Università degli Studi di Bari - Dipartimento per lo Studio delle Societa Mediterranee ( email )

Piazza Umberto I
70124 Bari, 70121
Italy

CERIS-CNR ( email )

Via Avogadro 8
10121 Torino
Italy

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