Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/236361 
Year of Publication: 
2021
Series/Report no.: 
IZA Discussion Papers No. 14330
Publisher: 
Institute of Labor Economics (IZA), Bonn
Abstract: 
This paper explores how value-chain governance affects the innovation performance of suppliers of intermediate products. We take advantage of a unique dataset of Italian firms to identify governance regimes along suppliers’ technological capabilities and the level of explicit coordination in the value chain. Our results indicate that ‘modular’ value-chain governance is more conducive to innovation for suppliers, especially when these firms have medium capability levels. Conversely, market-based governance modes appear to strongly reduce the innovativeness of suppliers with low capability. These patterns are also reflected in export performances and sales of innovative products. Our results go partially against other findings in the GVC literature, whereby relational value chains are seen to provide the most favorable environment to learn and innovate. Interestingly, the highest levels of technological capabilities consistently reduce the correlation between supplying intermediates and innovation performance, which indicates that technology-gap is an important mediator of learning within value chains.
Subjects: 
global value chains
export
suppliers
innovation
technological capabilities
JEL: 
F14
O30
Document Type: 
Working Paper

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