Business Services: The New Frontier of Competitiveness

The business services sector plays an increasingly important role in enhancing a country's competitiveness. Reduced product cycles times, prompt delivery, and improved customer services are crucial for the survival of firms, and in particular exporters, in a competitive environment. As a result, the service content of final exports is increasing. In traditional and high-labor intensive sectors, it is the creation of a brand, design and marketing to play a central role, whereas in technology-intensive sectors, this role is played by R&D and after sale assistance. Recently, in line with developments at world level, the Italian economy has witnessed a significant increase of business services. In the EU's total supply of business services, however, Italy still occupies a relatively weak position, and the average size of Italian business services firms is below the European one. Such features, given the relevance of services in firms' competitiveness and in internationalization trends may represent a factor of weakness for the Italian economy. This book recommends to invest resources in business services to "support" production activities: it highlights which services may "contribute" the most to the internationalization process; therefore helping to formulate adequate economic policies. The book also shows that the supply of business services is highly diversified across regions and categories, in terms of both endowment and access. Only by reducing these differences, the country's competitiveness can be improved.

This research was coordinated by the Fondazione Manlio Masi in collaboration with the Istituto affari internazionali. It has been presented at the conference "Italy's external competitiveness" jointly organized by the Fondazione Manlio Masi, Istituto affari internazionali, Department of Treasury-Ministry of Economy and Finance and Fondazione Economia Tor Vergata-CEIS and held in Rome, November 24th and 25th 2009.

Soveria Mannelli, Rubbettino, 2010, vii, 162 p. (Analisi Fondazione Manlio Masi ; 13)
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Introduction, by Giorgia Giovannetti, Paolo Guerrieri, Beniamino Quintieri
1. The increasing role of business services in the competitiveness and internationalization of firms, p. 3
2. International trade and internationalization of business services, p. 5
3. Italy's competitive scenario: trends, growth perspectives and internationalization of the business services sector, p. 8
4. Structure of the volume, p. 10

1. Crossing borders: exploring the relationships between different modes of international provision of services, by Luis Rubalcaba and Stefano Visintin
Introduction, p. 15
1.1. Internationalization: stylized facts and factors, p. 17
1.2. A survey of the literature on internationalization and relationship between modes of provision, p. 24
1.3. Methodology, p. 28
1.4. Results, p. 40
1.5. Discussion and concluding remarks, p. 43
Appendix, p. 46

2. Internationalization, technology and business services specialization in Europe, by Paolo Guerrieri and Valentina Meliciani
Introduction, p. 49
2.1. Explaining specialisation in business services, p. 50
2.2. Empirical analysis, p. 59
2.3. Conclusions, p. 71

3. The impact of technological and organizational innovations on firms' performances: evidence from the Community innovation survey, by Rinaldo Evangelista and Antonio Vezzani
Introduction, p. 73
3.1. Assessing the economic impact of technological and non technological innovations. Some conceptual and methodological issues, p. 75
3.2. Data and methodology, p. 78
3.3. Innovation modes in manufacturing and services industries, p. 82
3.4. The impact of technological and organizational innovation on economic performances, p. 90
3.5. Conclusions, p. 100

4. The effect of foreign investments on European regional productivity, by Davide Castellani and Fabio Pieri
Introduction, p. 103
4.1. Related literature, p. 106
4.2. Data sources and descriptive statistics, p. 108
4.3. Econometric results, p. 117
4.4. Concluding remarks, p. 143
Appendix, p. 145

5. Do FDI in business services follow FDI in manufacturing? Evidence from Italian firm-level data, by Massimo Armenise, Ilaria Cingottini and Giorgia Giovannetti
Introduction, p. 155
5.1. A brief description of business services in Italy according to our dataset, p. 159
5.2. The theoretical background and the econometric model, p. 162
5.3. Empirical implementations, p. 168
5.4. Determinants of FDI in manufacturing and business services: results, p. 170
5.5. Does the location of manufactures affect the location choices of business services firms?, p. 171
5.6. Conclusions, p. 178
Appendix, p. 179

6. The effects of services offshoring on productivity, An empirical analysis of Italian and European data, by Rosario Crinò
Introduction, p. 185
6.1. Brief overview of the empirical literature, p. 188
6.2. Data and stylized facts, p. 191
6.3. Preliminary evidence: services offshoring and labor productivity, p. 196
6.4. Services offshoring and TFP: empirical model and results, p. 200
6.5. Services offshoring and composition of domestic employments, p. 206
6.6. Synthesis and conclusions, p. 208

References, p. 241

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