Subcontracting in Italian Industry. Labour Division, Firm Growth and the North-South Divide

Subcontracting in Italian industry: labour division, firm growth and the North–South divide, Regional Studies. The aim of this paper is to investigate the impact of subcontracting on Italian manufacturing firms’ growth in the second half of the 1990s. The main results are: (1) producing as subcontractors does not penalize firms but can be a positive determinant of growth, especially when coupled with the propensity to innovate; (2) since a non-linear relationship between growth and subcontracting emerges, an organizational mode not fully specialized in either subcontracting activity or direct sales may be optimal; and (3) the deep dualism of the Italian industrial structure is confirmed, as Southern subcontractors show poorer performances and slower growth.