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Small Business Economics
Published in: Small Business Economics 1/2021

23-12-2019

Neodualism in the Italian business firms: training, organizational capabilities, and productivity distributions

Authors: Giovanni Dosi, Dario Guarascio, Andrea Ricci, Maria Enrica Virgillito

Published in: Small Business Economics | Issue 1/2021

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Abstract

What has been the dynamics of productivity in the Italian business firms in the aftermath of the crisis? And what has been the impact of training efforts upon such dynamics? In this work, we address these questions exploring a unique Italian micro-level dataset which links information on the amount and the nature of training and firm balance-sheet data. First, we document what we call a neodualist tendency with a leader-laggard dynamics entailing a widening support of the productivity distributions. Second, we analyze the relationship between productivities and training intensities by means of quantile regression analysis. There is indeed some relationship in the whole sample which however gets much weaker when disaggregating by sector and by size. Moreover, hardly any dynamic relationship appears, either between initial training intensities and subsequent productivity changes or between changes in both variables. Our results do not imply that training is not important, but that its effectiveness must be shaped by the interaction with other firm-specific characteristics, associated with idiosyncratic organizational capabilities.
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Appendix
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Footnotes
1
Such Italian patterns are also discussed in Calligaris et al. (2016), Codogno (2009), and Daveri and Jona-Lasinio (2008).
 
2
Conversely, to our knowledge, patterns of convergence at the firm level are currently characterizing some emerging economies such as China (Yu et al. 2015), where a process of internal “creative restructuring” has seen state-owned and public-private enterprises as the leading firms in triggering productivity growth.
 
3
The RIL survey sample is stratified by size, sector, geographic area and the legal form of firms. For more details on RIL questionnaire, sample design, and methodological issues, see INAPP (2017).
 
4
“Measured productivity” might either capture (i) value added at constant prices or, more rarely, (ii) physical output (e.g., tons of steel). The physical measure and related unit prices are rarely available given ubiquitous multi-product firms (Foster et al. 2008). So, generally, micro-analyses use the latter, as we do. Such a measure captures both “physical productivity” and the ability of firms to charge higher prices per unit of output.
 
5
Note that for the main variables, the data collected by RIL survey in 2015 really refer to 2014, while those derived from the RIL survey in 2010 are aligned (with minor exceptions) to the same year. Thus, in what follows, we mention the longitudinal sample RIL 2010–2014. More details are available upon request.
 
6
The RIL survey has been recently used in other studies focusing on the relationship between unionization, type of labor contracts, corporate governance, and Italian companies’ performance (Berton et al. 2017; Devicienti et al. 2016; Devicienti et al. 2017, 2018; Damiani et al. 2018).
 
7
The deflators are available at http://​dati.​istat.​it/​#.
 
8
Note that the dynamics in labor productivities of the RIL sample are quite similar to the AIDA one. Comparisons, available upon request, show that when some discrepancies appear, the latter database most often displays a higher fall then the corresponding RIL cohorts.
 
9
Our dataset reports a much severe drop in labor productivity than the one reported by OECD data (originated by Eurostat) on the whole universe. However, the drop is closer as mentioned to the one documented by AIDA. The difference is due to two main reasons, namely, first, ownership structure (the RIL-AIDA dataset only contains limited liability companies) and, second, size (the RIL-AIDA dataset excludes firms below 5 employees). The difference between our sample and the universe is itself informative, in that micro-firms undertook a disproportional share of the total labor shedding which followed the double dip of the Italian economy.
 
10
Note that here by entry and exit we mean into and out of the sample, as we are unable to distinguish genuine birth and death from attrition.
 
11
So, in case of fat-tailed distributions, as the one presented in the paper, the mean is not a sufficient statistics to characterize the distribution itself. Information on the higher moments are required. For these reasons, we believe that kernels increase the understanding of, e.g., whether the left or the right tails are governing the dispersion.
 
12
Our independent variable is defined as ln(training cost/n. employees +1) to avoid to assign value 0 to both effective zero training and very low training.
 
13
Notice that this variable is included only in the Canay’s specification.
 
14
In particular, we are aware that the two-step procedure proposed by Canay may suffer from a bias in a short time span (T = 2) and that the assumption that the additive term ηi in equation (1) is treated as pure location shifter parameter common to all conditional quantiles restricts the types of firms’ unobserved heterogeneity that we can handle. On the other hand, using the Canay’s technique—under the hypothesis that the separate term ηi is independent from the rest of the control variables—is more informative in our context than quantile models with non-additive fixed effects—which maintain the non-separable terms (Powell 2016). In this latter case, the estimated coefficients are consistent for small T but the role of time invariant firms’ unobserved heterogeneity cannot be properly accounted for.
 
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Metadata
Title
Neodualism in the Italian business firms: training, organizational capabilities, and productivity distributions
Authors
Giovanni Dosi
Dario Guarascio
Andrea Ricci
Maria Enrica Virgillito
Publication date
23-12-2019
Publisher
Springer US
Published in
Small Business Economics / Issue 1/2021
Print ISSN: 0921-898X
Electronic ISSN: 1573-0913
DOI
https://doi.org/10.1007/s11187-019-00295-x

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