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.

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

Del Prete, Davide
2018

Abstract

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.
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/11367/73593
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