The effect of globalisation on industrial districts in Italy: evidence from the footwear sector



These disadvantages are strongly related to the issue of governance within the chain.
Co-ordination of the value chain is clearly in the hands of top brand companies who
keep their control on rent-rich activities such as design, branding, marketing. They are
also increasingly becoming more directly involved in shoe and component production.
Nevertheless, only two sample firms have clearly defined their relationship with high
fashion companies as quasi-hierarchical, while the remaining ones reported that there is
some degree of co-operation.

A clear assessment of how hierarchical these relationships are is a difficult task.
There are mixed signs: in many cases firms are not fully dependent on the top brand
value chain, producing less than 50 per cent of total production as subcontractors. In
some cases they even contribute to design but, on the other hand, most of them suffer
from functional downgrading and are loosing their direct link with the market.
Furthermore 75 per cent complain about dependence on high fashion companies.

We may conclude that the most common type of governance within this chain is
somewhere in between network and quasi-hierarchy. The clear leaders in the chain are
the top brand companies. They are definitely setting the parameters that the rest of the
actors have to comply with but in many cases they are also co-operating with their
highly qualified partners to obtain top quality products and besides, very importantly,
they are willing to share with them part of their rent in order to acquire their production
skills.

To conclude, it is useful to summarise our main empirical findings in connection
with our reference point on value chains (Gereffi 1999). The top brand value chain
confirms Gereffi's trend toward 'buyer-driven' chains. However, producers from
developed countries are involved in the chain and, their participation, far from having
an upgrading effect (much stressed in Gereffi's work), has a functional downgrading
effect instead. Nevertheless, although firms have abandoned some key functions, their
performance is still very positive because they have the prospect of sharing with the
chain’s leaders (most of which are Italian) the high rents of the luxury industry.

3.2 The Barletta shoe district

Barletta is the second largest footwear district in the south of Italy and the seventh
largest in Italy (ISTAT, 1996). The origins of the district date back to the years before

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