Firm’s Efficiency and Global Value Chains: An Empirical Investigation on Italian Industry

This paper investigates the effect of participation in global value chains (GVCs) on firms’ efficiency and explores heterogeneity in this impact across different firms, according to GVC governance, positioning in the chain and time length of GVCs participation. Our analysis takes advantage of survey data providing information on involvement in GVCs for a large set of Italian industrial SMEs between 2008 and 2012. We employ Data Envelopment Analysis (DEA) to retrieve a measure of firms’ technical efficiency (i.e., DEA efficiency scores) and estimate the impact of involvement in GVCs on firms’ efficiency through propensity-score matching techniques and truncated regression. Our results show that participation in GVCs induces significant efficiency premia, especially for suppliers, with stronger effects in the case of relational modes of participation.