Performance, IT maturity and offshoring behaviour of Italian manufacturing corporations in the dire straits of globalisation

de Panizza, Andrea (2008): Performance, IT maturity and offshoring behaviour of Italian manufacturing corporations in the dire straits of globalisation. Published in: ICT impact assessment by linking data across sources and countries (August 2008): pp. 204-214.

Abstract

This study examines productivity and profitability of Italian manufacturing corporations in relation to IT usage and offshoring of intermediate goods. The information set is based on a balanced panel of enterprises' economic accounts and foreign trade statistics for the years 2000-2004, linked to 2002 and 2004 surveys on ICT usage. The analytical framework is similar to one previously developed for Sweden, allowing for (partial) comparability. Offshoring is positively related to productivity, although the significance of intensity variables depends on employment size and industry. The same occurs for some variables of IT maturity (workers using PCs and a composite indicator), and for human resources as proxied by cost of labour (i.e. wage levels). These variables also show a positive impact on profitability, although limited to productions which are easy to outsource. Offshoring decisions and IT maturity, instead, do not present any strong mutual relation. The key issue of the direction of causality between IT maturity, offshoring and productivity is also tentatively addressed: lagged offshoring appears to weakly impact productivity, while lagged IT maturity does not, and a reverse causality from productivity to IT maturity is revealed. This first evidence, albeit limited, challenges some commonplaces, suggesting the coexistence of different business models. A richer information set should allow for a more appropriate treatment of these issues, as well as for extending the analysis to other, crucial determinants of performance.

• Item Type: MPRA Paper
• Language: English
• Keywords: Firm behaviour, productivity, profitability, IT usage, offshoring, industrial studies, Manufacturing, Italian economy
• Subjects: D - Microeconomics > D2 - Production and Organizations > D21 - Firm Behavior: Theory; L - Industrial Organization > L2 - Firm Objectives, Organization, and Behavior > L25 - Firm Performance: Size, Diversification, and Scope; O - Economic Development, Innovation, Technological Change, and Growth > O3 - Innovation ; Research and Development ; Technological Change ; Intellectual Property Rights > O33 - Technological Change: Choices and Consequences ; Diffusion Processes; L - Industrial Organization > L2 - Firm Objectives, Organization, and Behavior > L24 - Contracting Out ; Joint Ventures ; Technology Licensing; O - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development > O14 - Industrialization ; Manufacturing and Service Industries ; Choice of Technology

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