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The smile curve at the firm level: Where value is added along supply chains

Rungi, Armando and Del Prete, Davide The smile curve at the firm level: Where value is added along supply chains. Economics Letters, 164. pp. 38-42. ISSN 01651765 (2018)

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In this paper, we investigate at the firm-level where value is added along supply chains on a sample of about 2 million firms in the European Union. In line with the hypothesis of a ‘smile curve’, we detect a non-linear U-shaped relationship between the value added content of a firm and its distance from final consumption. Tasks at the early and late stages of the supply chains generate higher value added, possibly due to a higher knowledge-intensity, after controlling for firm heterogeneity. Importantly, our work shows that it is possible to exploit firm-level databases for an empirical microfoundation of value generation, which is useful for understanding the possibly unequal benefits of participating in global value chains.

Item Type: Article
Identification Number: 10.1016/j.econlet.2017.12.038
Uncontrolled Keywords: Global value chains; Firm level; Smile curve; Downstreamness; Value added
Subjects: H Social Sciences > HB Economic Theory
H Social Sciences > HD Industries. Land use. Labor
Research Area: Economics and Institutional Change
Depositing User: Caterina Tangheroni
Date Deposited: 10 Jan 2018 14:19
Last Modified: 10 Jan 2018 14:19
URI: http://eprints.imtlucca.it/id/eprint/3855

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