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The advantages of formalizing networks: new evidence from Italian SMEs

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Listed:
  • Maurizio Cisi

    (University of Turin)

  • Francesco Devicienti

    (University of Turin & Collegio Carlo Alberto)

  • Alessandro Manello

    (University of Turin & IRCrES-CNR)

  • Davide Vannoni

    (University of Turin & Collegio Carlo Alberto & IRCrES-CNR)

Abstract

Using a large sample of Italian small and medium-sized enterprises (SMEs), we investigate the effect of business cooperation realized through a “network contract” on the economic performance of network members. We find that establishing a formal business network has a positive effect on a firm’s gross margin ratio and exports, but not on profits. The advantages of this type of networking are stronger in the cases of the following: smaller firms; firms operating in traditional markets; firms operating in turbulent markets; firms located in less developed areas; and firms not part of an industrial district. The characteristics of a network (such as its size, geographical dispersion, and the sectorial diversity of its members) also have an impact on firm performance.

Suggested Citation

  • Maurizio Cisi & Francesco Devicienti & Alessandro Manello & Davide Vannoni, 2020. "The advantages of formalizing networks: new evidence from Italian SMEs," Small Business Economics, Springer, vol. 54(4), pages 1183-1200, April.
    • Handle: RePEc:kap:sbusec:v:54:y:2020:i:4:d:10.1007_s11187-018-0127-0
    DOI: 10.1007/s11187-018-0127-0
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    Cited by:

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    3. Focacci, Chiara Natalie & Santarelli, Enrico, 2021. "Job Training, Remote Working, and Self-Employment: Displaced Workers Beyond Employment Hysteresis," GLO Discussion Paper Series 780, Global Labor Organization (GLO).
    4. Luciana Gondim de Almeida Guimarães & Pierre Blanchet & Yan Cimon, 2021. "Collaboration among Small and Medium-Sized Enterprises as Part of Internationalization: A Systematic Review," Administrative Sciences, MDPI, vol. 11(4), pages 1-27, December.
    5. Lorenzo Compagnucci & Alessio Cavicchi & Francesca Spigarelli, 2019. "The network contract in the agrifood industry: An exploratory study on collaborative drivers in central Italy," Economia agro-alimentare, FrancoAngeli Editore, vol. 21(2), pages 335-358.
    6. Francesco Devicienti & Elena Grinza & Alessandro Manello & Davide Vannoni, 2025. "Employer cooperation, productivity and wages: new evidence from inter‐firm formal network agreements," Economica, London School of Economics and Political Science, vol. 92(365), pages 1-41, January.
    7. Zofia Gródek-Szostak & Marcin Suder & Rafał Kusa & Jakub Sikora & Marcin Niemiec, 2020. "Effectiveness of Instruments Supporting Inter-Organizational Cooperation in the RES Market in Europe. Case Study of Enterprise Europe Network," Energies, MDPI, vol. 13(23), pages 1-19, December.
    8. Stojčić, Nebojša & Dabić, Marina & Musteen, Martina, 2024. "With a little help from my friends: Institutional obstacles, networking, and SME exporting in emerging European and Asian economies," International Business Review, Elsevier, vol. 33(3).
    9. Francesco Aiello & Paola Cardamone & Lidia Mannarino & Valeria Pupo, 2023. "Networks and family firm performance: some evidence from Italy," Applied Economics Letters, Taylor & Francis Journals, vol. 30(5), pages 620-625, March.
    10. Laura Corazza & Maurizio Cisi & Greta Falavigna, 2022. "The enabling role of formalized corporate networks to drive small and medium‐sized enterprises toward sustainability," Business Strategy and the Environment, Wiley Blackwell, vol. 31(1), pages 545-558, January.
    11. Cristian Barra & Nazzareno Ruggiero, 2022. "How do dimensions of institutional quality improve Italian regional innovation system efficiency? The Knowledge production function using SFA," Journal of Evolutionary Economics, Springer, vol. 32(2), pages 591-642, April.
    12. Mir Satar & Sager Alharthi & Muzaffar Asad & Amer Alenazy & Muhammad Uzair Asif, 2024. "The Moderating Role of Entrepreneurial Networking between Entrepreneurial Alertness and the Success of Entrepreneurial Firms," Sustainability, MDPI, vol. 16(11), pages 1-19, May.
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    14. Valentina Pieroni & Nicola Lattanzi & Massimo Riccaboni, 2024. "The dynamic impact of inter-firm network agreements," Small Business Economics, Springer, vol. 63(3), pages 939-969, October.

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