Vertical Integration Strategies in the Italian Satellite Industry: Theoretical Foundations, Empirical Evidence, and Future Outlooks

This thesis explores vertical integration strategies in the Italian satellite industry within the broader context of the New Space Economy. Once dominated by state-led programs, the space sector has become increasingly open to private firms and SMEs, driven by technological innovation and lower entry barriers. Italy holds a leading European position, supported by a strong network of specialized companies and integrators. The research aims to assess how different degrees of vertical integration influence firm performance. After reviewing key theoretical frameworks (Transaction Cost Economics, Resource-Based View, and Dynamic Capabilities) the study combines quantitative and qualitative analyses. Using a proprietary dataset of Italian firms active in the satellite value chain, vertical integration is measured through the Adelman Index (value added to revenues) and performance through Return on Assets (ROA). Regression results indicate a positive relationship between integration and profitability: firms that internalize key activities such as payload design, software, and data management tend to achieve higher efficiency and strategic resilience. Complementary evidence from case studies and surveys (e.g., CShark, 2NDSpace, NPC Spacemind) highlights the emergence of “selective integration,” where companies internalize critical functions while outsourcing standardized components. This hybrid model enables flexibility, protects intellectual property, and fosters innovation without excessive costs. Overall, the thesis concludes that vertical integration remains a relevant competitive strategy in the Italian satellite industry, provided it is applied selectively. For policymakers, supporting SMEs through targeted R&D and financing initiatives is essential to sustain innovation and reinforce Italy’s role in the evolving European space ecosystem.