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The Impact of Formal Networking on the Performance of SMEs

Author

Listed:
  • Maurizio Cisi

    () (Department of Management, University of Torino, Italy)

  • Francesco Devicienti

    () (Department of Economics and Statistics (Dipartimento di Scienze Economico-Sociali e Matematico-Statistiche), University of Torino, Italy)

  • Alessandro Manello

    () (Department of Economics and Statistics (Dipartimento di Scienze Economico-Sociali e Matematico-Statistiche), University of Torino, Italy)

  • Davide Vannoni

    () (Department of Economics and Statistics (Dipartimento di Scienze Economico-Sociali e Matematico-Statistiche), University of Torino, Italy)

Abstract

Using a large sample of Italian small and medium enterprises (SMEs), we investigate the effect of membership in a formal business network ("contratto di rete") on firms' economic performance. We find that network participation has a positive effect on value added and exports, but not on profitability. The advantages of networking are stronger in the case of: smaller SMEs, firms operating in traditional and in more turbulent markets, firms located in less developed areas and firms not already exploiting the weaker ties offered by industrial districts. Network characteristics, such as size, geographical dispersion and diversity, are also found to influence performance.

Suggested Citation

  • Maurizio Cisi & Francesco Devicienti & Alessandro Manello & Davide Vannoni, 2016. "The Impact of Formal Networking on the Performance of SMEs," Working papers 039, Department of Economics and Statistics (Dipartimento di Scienze Economico-Sociali e Matematico-Statistiche), University of Torino.
  • Handle: RePEc:tur:wpapnw:039
    as

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    File URL: http://www.biblioecon.unito.it/biblioservizi/RePEc/tur/wpapnw/m39.pdf
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Formal Business Network; Small and Medium Firms; Economic Performance;

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • L24 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Contracting Out; Joint Ventures
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • M21 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - Business Economics

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