Abstract
Abstract This paper analyzes the relationship between local-level vertical relatedness and firms’ services outsourcing, using a data set of 46,671 Italian manufacturing firms observed over the period 1999–2007. The analysis uses a firm-level index of services outsourcing based on the Adelman index, and it proposes a new measure of vertical relatedness. Overall, the results suggest that it is not agglomeration per se that matters for services outsourcing but rather the presence of vertically related industries. The role of firm-level heterogeneity in terms of size, geographic location, and technological regime also emerges.
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