Title: Outsourcing and firm performance: evidence from Italian automotive suppliers

Authors: Giuseppe Calabrese, Fabrizio Erbetta

Addresses: Ceris, Institute for Economic Research on Firms and Growth, National Research Council, Via Avogadro 8, I-10121, Torino, Italy. ' University of Eastern Piedmont, Via Perrone, 18, I-28100, Novara, Italy

Abstract: During the last decade a large number of firms operating in most industries have undertaken outsourcing processes. This tendency has involved, above all, automotive suppliers. The proposal of this paper is to investigate whether the outsourcing strategy has positively affected the overall performance of these firms. This has been observed by means of financial statements and under different viewpoints: growth, productivity, financial dependence and profitability. The findings point out that the relationship between outsourcing and performance does not follow a linear tendency. Furthermore, the firms always characterised by low integration or that deverticalised their productive structure over time have shown the highest growth, whereas firms with high integration level or that pursued a verticalisation strategy performed better in respect of profitability and debt ratio.

Keywords: automotive suppliers; outsourcing; ratio analysis; automobile industry; Italy; organisational performance; firm performance; make-or-buy strategy; growth; productivity; financial dependence; profitability.

DOI: 10.1504/IJATM.2005.008585

International Journal of Automotive Technology and Management, 2005 Vol.5 No.4, pp.461 - 479

Published online: 04 Jan 2006 *

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