?url_ver=Z39.88-2004&rft_val_fmt=info%3Aofi%2Ffmt%3Akev%3Amtx%3Adc&rft.relation=http%3A%2F%2Feprints.imtlucca.it%2F3663%2F&rft.title=The+%E2%80%9CSmile+Curve%E2%80%9D%3A+where+Value+is+Added+along%0D%0ASupply+Chains&rft.creator=Rungi%2C+Armando&rft.creator=Del+Prete%2C+Davide&rft.subject=HB+Economic+Theory&rft.subject=HD+Industries.+Land+use.+Labor&rft.description=In+this+paper+we+analyze+where+value+is+added+along+supply+chains+on+a+sample+of+more+than+2%0D%0Amillion+of+firms+in+the+European+Union.+We+detect+a+non-linear+U-shaped+relationship+between+the%0D%0Avalue+added+generated+by+firms+and+their+position+on+a+productive+sequence%2C+for+which+tasks+at+the%0D%0Atop+and+at+the+bottom+show+higher+value+added.+Our+findings+are+in+line+with+previous+hypotheses%0D%0Aon+the+existence+of+a+so-called+'smile+curve'%2C+resumed+by+both+business+and+economic+studies+and%0D%0Adiscussed+at+length+in+international+fora.+Our+results+are+robust+to+different+empirical+strategies+for%0D%0Aflexible+functional+forms.+As+far+as+we+know%2C+ours+is+the+first+firm-level+successful+attempt+to+test%0D%0Afor+value+generation+along+supply+chains.+Further%2C+we+find+empirical+support+for+a+phenomenon+of%0D%0Adomestic+retention+of+value+added+by+MNEs%2C+which+may+prefer+keeping+at+home+the+tasks+at+higher%0D%0Apotential+to+safeguard+present+and+future+competitive+advantages.+By+country%2C+intermediate+stages%0D%0Aof+production+are+at+higher+value+when+performed+by+foreign+as+liates%2C+whereas+domestic+producers%0D%0Aretain+higher+value+at+the+very+top+and+at+the+very+bottom+of+the+supply+chain%2C+organized+either%0D%0Aas+independent+suppliers+or+as+domestic+affiliates.+Although+an+economic+theory+is+still+missing%0D%0Afor+explaining+how+and+why+value+generation+is+non-linear+along+a+typical+technological+sequence%2C%0D%0Ahere+we+argue+that+a+microfoundation+with+firm-level+data+is+useful+for+understanding+the+growth%0D%0Apotential+of+countries'+specialization+patterns+along+different+segments+of+supply+chains.&rft.publisher=IMT+School+for+Advanced+Studies+Lucca&rft.date=2017-03&rft.type=Working+Paper&rft.type=NonPeerReviewed&rft.format=application%2Fpdf&rft.language=en&rft.rights=cc_by_nd&rft.identifier=http%3A%2F%2Feprints.imtlucca.it%2F3663%2F1%2FEIC_WP_5_2017.pdf&rft.identifier=++Rungi%2C+Armando+and+Del+Prete%2C+Davide++The+%E2%80%9CSmile+Curve%E2%80%9D%3A+where+Value+is+Added+along+Supply+Chains.++EIC+working+paper+series++%235%2F2017++++IMT+School+for+Advanced+Studies+Lucca++++ISSN+2279-6894.++++++