Giulio Cainelli

The Impact of Innovation on Economic Performance in Services

This article empirically explores the relationship between innovation and economic performance in services at the firm level. The empirical analysis is based on a unique longitudinal firm-level data set, which matches the Italian Community Innovation Survey (CIS II) data (1993–1995) and a set of economic indicators provided by the Italian System of Enterprise Account (1993–1998). In particular the empirical analysis aims at assessing whether the presence of innovation and the amount of resources devoted to innovation are able to explain the economic performance of firms in the service sector. The results presented show that innovating firms out perform non-innovating firms in terms of productivity levels and economic growth. Productivity is also found to be linked to the amount of innovation expenditures, especially those devoted to the acquisition and internal development of new software.

Environmental innovations, local networks and internationalization

This paper investigates the drivers of the environmental innovations (EI) introduced by firms in local production systems (LPS). The role of firm network relationships, agglomeration economies and internationalization strategies is analysed for a sample of 555 firms in the Emilia-Romagna region, North-East of Italy. Cooperating with ‘qualified’ local actors – i.e. universities and suppliers – is the most important driver of EI for most firms, along with their training policies and IT innovations. The role of agglomeration economies is less clear and seems to depend on the EI propensity of more locally oriented firms playing in district areas, which might even turn agglomeration into dis-economies. Networking effects and agglomeration economies are instead found to strongly promote the adoption of EI by multinational firms, thus highlighting the importance of local-global interactions. We provide some interesting findings for particular kinds of challenging EI in fields as CO2 abatement and ISO labelling, generally extending the analysis EI driver by joining local and international factors.

Agglomeration, Related Variety, and Vertical Integration

Abstract Several recent studies have investigated the relationship between the geographic concentration of production and vertical integration, based on the hypothesis that the spatial agglomeration of firms in the same industry facilitates input procurement, thereby reducing the degree of vertical integration. This article contributes to this debate in two ways: first, we focus on interindustry vertical integration, and second, we consider the effects on vertical integration of unrelated and vertically related variety at the local level. The latter was measured using information from input-output tables and captured the opportunities for outsourcing within the local system. A data set of 24,663 Italian business groups in 2001 was used to estimate Tobit models to investigate the influence of vertically related variety and other agglomeration forces on the degree of vertical integration of groups. We found that vertical integration is influenced by industry specialization at the local level and that higher vertically related variety reduces the need for firms to integrate activities, since they have more opportunities to acquire intermediate goods and services within the local system. We analyze the manufacturing and different macroareas and show that this relationship is also influenced by technology and differences in the organization of economic activities at the local level.

Environmental innovations, complementarity and local/global cooperation: evidence from North-East Italian industry

This paper exploits a dataset of 555 industrial firms, located in the Emilia Romagna region in 2006–2008, to analyse complementarity in ecoinnovation (EI) and to test the role of firm cooperation and internationally oriented strategies. Results show that the degree of complementarity between various EI factors is quite high with networking and corporate social responsibility playing dominant roles. EIs do not undermine economic performance, either in the short run or in the context of the global financial crisis. Econometric analyses highlight that international characteristics, especially foreign ownership, and networking with other firms and institutions are important for EI adoption, while general research and development is less so. Over and above the structural features of firms, strategic relationships within regions and at the international level are relevant and differentiate innovative performance. This study provides an in-depth regional investigation which complement the information gathered in the last wave of the community innovation survey which included questions on EI over the same period and is available for France, Italy and Germany.

Environmentally-Oriented Innovative Strategies and Firm Performances in Services - Micro-Evidence from Italy

This paper aims at analysing the role of the environment in innovative strategies based on firm economic performance indicators such as employment, turnover, and labour productivity growth. We exploit a unique dataset of 773 Italian service firms with 20 or more employees comprising 1993-1995 CIS II data on firm innovation strategic motivations and 1995-1998 data on employment, turnover, and labour productivity from the System of the Enterprise Account (SEA). We specify a Gibrat-like empirical model in which the covariates include firm strategies (innovation and environmental), and a set of other explanatory variables and controls. Our econometric findings show a negative link between environmental motivations and growth in employment and turnover and a consequent not significant effect on labour productivity growth. The effect on employment is partly in line with past evidence and may derive from efficiency improvements (dematerialization processes) which also impact on efficiency by reducing workforce number. It is plausible that the net effect derives from the absence of low skilled employment and a creation of high skilled jobs, as a consequence of increased environmental awareness. The effect on turnover shows a negative impact from environmental innovation strategy, implying either a short-medium effect, possibly balanced in the long run by net benefits in terms of higher added value, or a real negative impact, which may be contingent on the observed period, when environmental strategies where not at the heart of strategic management policies. However, productivity-related effects (the core of performance indicators) are not significant. Mainstream hypotheses related to eventual negative impacts are thus not confirmed, although Porter-like effects and virtuous circles between environmentally strategies and performance do not seem to be present.

Innovation in industrial districts: Evidence from Italy ∗

The aim of this paper is to show that Italian manufacturing firms belonging to Marshallian industrial districts carry out a higher innovative effort than is usually acknowledged. The empirical analysis makes use of a panel of 1,218 district and non‐district firms belonging to traditional sectors. Data refers to the years 1992 and 1995. We have estimated an augmented Cobb–Douglas production function. The estimates make it possible to empirically identify three different determinants of firms’ productivity: (i) the intentional innovative activity; (ii) the “district effect”; and (iii) the joint district and innovation effect. The results show that firms’ membership in industrial districts and product innovations are key factors in explaining the productivity of firms working in traditional Italian sectors.

Do agglomeration and technology affect vertical integration? Evidence from Italian business groups

Abstract The aim of this paper is to analyse the role of technology and spatial agglomeration in decisions about vertical integration. It starts from the hypothesis that the business group, defined as a set of firms under common ownership and control, is the appropriate unit to delimit the firm’s boundary. We use information drawn from input–output tables to detect the presence of positive inter‐industry exchanges and whether or not activities in a group are vertically related. Accounting for endogeneity problems, we estimate Probit and Linear Probability models to investigate the role of technology and spatial agglomeration on vertical integration decisions empirically. Consistent with property rights theory, our results show that the technology intensity of acquirers matters for backward integration choices and, moreover, that agglomeration plays a role in vertical integration only when it operates jointly with technology.

Business groups and the boundaries of the firm

This paper aims to show that the business group – i.e. the set of firms under common ownership and control – is the most appropriate unit to study the behavior and organization of firms and define their boundaries. Particular emphasis is given to notions such as unitary direction – i.e. the influence over strategic decisions – and administrative co-ordination which allow owners to exercise supervision and authority over the controlled companies.

The strength of strong ties: How co-authorship affect productivity of academic economists?

Abstract Increased specialization and extensive collaboration are common behaviours in the scientific community, as well as the evaluation of scientific research based on bibliometric indicators. This paper aims to analyse the effect of collaboration (co-authorship) on the scientific output of Italian economists. We use social network analysis to investigate the structure of co-authorship, and econometric analysis to explain the productivity of individual Italian economists, in terms of ‘attributional’ variables (such as age, gender, academic position, tenure, scientific sub-discipline, geographical location), ‘relational’ variables (such as propensity to cooperate and the stability of cooperation patterns) and ‘positional’ variables (such as betweenness and closeness centrality indexes and clustering coefficients).

Social Capital, R&D and Industrial Districts

The main idea behind this paper is that social capital is not, as generally suggested by the socio-economic literature, an individual attitude towards something which does not imply privately appropriable economic benefits. Actually, SC might and should be interpreted as a public component of an investment which implies private and public benefits entangled with each other. In order to put forward this idea, a dynamic theoretical model that assumes social capital as the public component of the impure public good R&D is developed. It shows that the ‘civic culture’ of the district area in which the firm works is not sufficient as an incentive to increase its investment in social capital, because this investment strictly depends on the economic convenience of investing in the impure public good. Social capital /networking dynamics might positively and complementarily evolve only if the opportunity cost of investing in innovation is sufficiently low. We consequently focus our attention on a specialized industrial district located in the Emilia Romagna region – the biomedical district of Mirandola (Modena) – characterised by a strong pattern of innovative activity. Using a proxy for innovative activity as dependant variable, we observe that R&D and networking/social capital arise as complementary driving forces for innovation outputs. When empirical evidence confirms that this complementarity plays a key role, and consequently strong links exist between market and non-market dynamics relating to firms, the role for policy actions targeted to social capital is larger. The policy effort should be targeted toward both market and non-market characteristics taken together, rather than solely to the production of (local) public goods (social capital) or innovation inputs as independent elements of firm processes. The input of SC alone is not sufficient to ensure innovation and growth: economic incentives matter. On the other hand, whenever SC dynamics are crucial for R&D private investments, the effect of economic incentives depends on the presence and degree of their complementarity.