Integrating Migrant-Owned Suppliers into Native Supply Chains: Evidence from the Italian Manufacturing Sector

Migrant entrepreneurship has become a structural component of manufacturing in advanced economies. This paper investigates whether these developments have affected the supply chains of native-owned firms by examining: a) the extent to which native manufacturing companies engage migrant suppliers, and b) the factors shaping their integration into supply networks. Drawing on a comprehensive database of Italian firms, we find that approximately one quarter of native manufacturing companies have developed supply chains that include migrant suppliers. However, the intensity of this engagement, measured by the share of purchases from migrant firms, remains limited. Fractional regression estimates indicate that the integration of migrant suppliers is constrained by established supplier relationships, firms’ limited capability to manage diverse supply networks and difficulties in recognizing migrant firms as viable business opportunities. By contrast, engagement with migrant suppliers does not appear to be driven by cost-minimization strategies and is not significantly associated with industries characterized by strong pressures for cost reduction. These findings contribute to the limited literature on supplier diversity and migrant entrepreneurship and provide policy-relevant insights into the barriers and opportunities affecting the inclusion of migrant suppliers in manufacturing supply networks.