An empirical assessment of vertical integration on a sample of Italian firms

none2In this paper we go through an empirical description of vertical integration (VI) on a sample of Italian firms over the last two decades. We provide a general assessment of the phenomenon and detailed investigation across time and size of firms. It clearly appears that VI has decreased overall during the last two decades, confirming the impact of outsourcing on the vertical organisation of firms. Moreover it appears that VI tends to be lower as the dimension of the firm increases and the trade orientation becomes more pronounced. As vertical disintegration (VD), or its close synonym outsourcing, is associated with higher flexibility it seems that larger and more export oriented firms tend to go VD in search of higher flexibility. The cost is the loss of control of the vertical chain of production.noneG. Rossini; D. RicciardiG. Rossini; D. Ricciard