Estimating Sourcing Premia Using Italian Regional Data

Abstract

AbstractThis paper explores the link between sourcing and performance for a representative sample of manufacturing firms located in Lombardy, which is the leading region of the Italian economy. The survey estimation methods that we applied to our original database reveal certain performance premia for firms that engage in foreign rather than domestic sourcing and in- rather than outsourcing. This result is robust to different specifications, samples, performance measures, and definitions of sourcing strategies.