Contractual networks: an organizational model to reduce the competitive disadvantage of small and medium enterprises (SM
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Contractual networks: an organizational model to reduce the competitive disadvantage of small and medium enterprises (SMEs) in Europe’s less developed regions. A survey in southern Italy Patrizia Pastore 1
& Antonio
Ricciardi 1
& Silvia
Tommaso 1
# The Author(s) 2019
Abstract Limitations faced by southern Italy’s small enterprises due to their dimensions may be overcome by cooperation strategies and network contracts. The international literature has highlighted that effectively governed business networks appear to more successfully allow partner firms to improve their economic performance and survive over time. This paper combines qualitative and quantitative analyses to test the above hypothesis. It also analyses the performance of southern Italian firms that have joined business network contracts equipped with legal personality — the so called “reti soggetto” or “heavy contractual networks” (HCNs) — compared to firms participating in business networks based only on contractual agreements, devoid of legal personality—the so called “reti contratto” or “light contractual networks” (LCNs). Our findings demonstrate that only 13% of all registered business networks are in fact operative. Among the networks with legal personality, approximately 28% are active networks. A similar trend was observed for network contracts devoid legal personality: only 11% are truly active. Performance measures (including profitability, financial situation indicators, and debt sustainability) also differ for firms belonging to HCN, compared to those belonging to LCN, in the years following the subscription of the network contract. Empirical analysis suggests that HCNs have significant positive effects on the performance of participant firms. We thus propose to verify the conditions that strengthen business networks in the south of Italy. We also recommend promoting the establishment of
* Patrizia Pastore [email protected]; http://www.unical.it/discag Antonio Ricciardi [email protected] Silvia Tommaso [email protected]
1
Department of Business Administration and Law, University of Calabria, Ponte Pietro Bucci – Cubo 3 C, 87036 Arcavacata di Rende (CS), Italy
International Entrepreneurship and Management Journal
networks with juridical subjectivity. Such networks can be effective tools to strengthen the competitiveness of SMEs despite external diseconomies, which can markedly improve their creditworthiness. Keywords Business networks . Business network contracts . Contractual networks .
Networks with legal personality . SMEs . Less developed European regions
Introduction In today’s increasingly competitive global market, firm success is increasingly linked to the ability to undertake and manage collaborative strategies and alliances. Business networks can be an effective strategy in this regard. They bring together firms to exchange knowledge; to share industrial, commercial, and technological information, services or facilities; to share investments as well as risks; and to cooperate in product or ma
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