Networks’ Contribution to Small-Sized Firms’ Internationalization

Abstract

This paper analyzes a new legislative instrument called “network contract” designed to support inter-firm cooperation. It aims to verify whether this type of formal cooperation is used by small firms to support their international strategies. Results indicate that internationalization is not the primary goal for firms who participate in network contracts: Italian small and medium-sized firms use this instrument to achieve different strategies of growth and long-term objectives. While we found that some firms have indeed increased their business activity abroad after joining the network, we also found that those with an international dimension do not seem to have changed their approach towards internationalization. Consequently, we argue that the network contract is not the most suitable tool for promoting internationalization among domestic firms, although internationalization may emerge as a by-product of inter-firm relationships.

Keywords: Network Contract; Networking Strategies; Internationalization; Inter-Firm Relationships; Italian Small and Medium-Sized Firms