Manello A., Calabrese G., Frigero P., Working Paper Cnr-Ceris, N° 06/2014

the chain. To do so, we briefly discuss several
types of supply chains which are useful to
analyse firms diversity, and a taxonomy of
roles inspired by the theory of networks.
In particular, our aim is to investigate if
automotive firms in particular position along
the supply chain show an higher technical
efficiency than others or if something similar
is valid for the degree of vertical integration.
Moreover, we try to check if the different
positions of the firm in relation to the efficient
DEA frontier are distributed according to their
roles along the supply chain or in relation with
the degree of vertical integration. Finally, to
summarize the main results, we adopt one of
the most modern econometric techniques to
identify the determinants of obtained technical
efficiency scores.
The remainder of the paper is organized as
follow. The section 2 briefly review the
relevant literature, section 3 describes the
DEA model adopted, while section 4 presents
the dataset. Section 5 shows our main results
and some general considerations conclude the
work.

2. LITERATURE REVIEW: VALUE
CHAINS, PRODUCTIVITY AND
VERTICAL INTEGRATION
A supply chain is always a hierarchical set
of firms linked at different level of a
productive process ending with a final
product. In vertical links (relation between
suppliers of different layers) and even in
horizontal links (relation between suppliers on
the same layer) market power is evenly
distributed. But, beyond the traditional,
focused on pricing over marginal cost, what
matters is the ability to influence technology
and product characters, starting from the

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projected final results, but involving also
intermediate component which influence
performances and quality appreciated by the
customers. So our main interest reside in the
analysis of three type of chain (defined by
governance): “captive: when the ability to
codify, in the form of detailed instructions,
and the complexity of product specifications
are both high, but supplier capabilities are
low; relational: when product specifications
cannot be codified, transactions are complex,
and supplier capabilities are high; modular:
when the ability to codify specifications
extends to complex products, and suppliers
have the competence to supply full packages
and modules” (Gereffi et al., 2005).
Using these criteria it is possible to connect
the shape of the supply chain with firms
performances, through vertical integration and
outsourcing in search of a model of
organization which could enhance the
productivity defined as the ratio between
costumers’ utility and total cost of inputs over
the whole vertical integrated sector. The
uneven distribution of market power
explained by a set of variables starting from
property rights, to assets specificity and
idiosyncratic relations, is a typical field of the
theories of the firm, but can be approximated
by some profitability indexes.
Some suggestion resides in the model
proposed by Van Assche (2005). He proposes
the distinction between: ideal outsourcing
(each supplier sells to a specific final firm);
standardized outsourcing (the burden of
customization of components falls on the
buyer) and customized outsourcing (when the
burden falls on the seller, which adopt flexible
manufacturing equipment). Unfortunately it is
not easy to collect information needed to
clearly classify suppliers.