Network agreements and firms’ economic performance: new empirical evidence from Italian Smes

Our paper proposes a large scale empirical investigation on the effect of networking. Taking advantage of the recent introduction of the Italian formal network agreement, we estimate the short term economic return for network members after the decision of entering network. We consisted a large and representative sample of Italian small and medium enterprises (SMEs) an we find positive effect on the value added created per unit of revenues as well as a positive effects on export, while no clear effects emerges in term of profits after becoming network member. Additional estimates based on subsamples show that the network advantages are stronger for small firms, for firms operating in traditional industries and for firms located in less developed areas. The characteristics of the network itself also influence the economic outcomes, substantially confirming previous empirical findings reported for smaller samples and different contexts