Production relocation and subcontractors’ resilience in manufacturing regions: does upgrading help to survive structural shocks?
The aim of this project is to assess how small subcontractors operating in low-tech manufacturing industries update their strategies in response to the decision of client firms to relocate production abroad. The main assumption is that, when small producers become more vulnerable in response to such unexpected shocks, strategic decisions are often taken out of necessity. In such circumstances, firms are forced to upgrade their status quo operations to successfully adapt to the changing economic circumstances. The focus of the empirical investigation is on Italian Small and Medium Enterprises (SMEs) operating as subcontractors in the clothing and footwear industry. This empirical study will use a comprehensive approach to identify production relocation, focusing on the impact of both captive offshoring and offshore outsourcing decisions implemented by client firms. The proposed study aims to assess whether ‘forced’ upgrading (i.e. strategy change in response to production relocation shocks) has beneficial effects on subcontractors’ performances. The main findings of this work are intended to inform the current debate on the distributional effects of international fragmentation of production.
I am sincerely honored to be a recipient of the prestigious RSA EC Grant. I have been a proud member of the RSA community since I was a PhD student. During the last few years, I have had the chance to attend several RSA conferences around the world, building my professional network and expanding my social circle. This grant will now help me to explore the consequences of international fragmentation of production on local economies, focusing on the strategies developed by small subcontractors in response to production relocation shocks.