The leverage effect of purchasing: an economic and financial study on a sample of firms listed on the italian stock exchange

The growing and globalizing competition induces companies to pay more attention to the purchasing function. Furthermore, purchasing expenditures represent more than a half of total corporate expenses in the US (Kapoor and Gupta, 1997). This paper establishes some figures for Italian firms for the period 1996-2002. The proportion of purchases in corporate expenses is found to be almost the same in our Italian sample as in US (70 percent), while the importance of indirect purchasing is higher in our sample (32 percent versus a US 20 percent), and it has been increasing over the last six years. From a theoretical perspective, we analyze the determinants of companies’ operating performance focusing on variations in the parameters of purchasing strategy.