The network contract and its influence on strategic decision of internationalization. Evidence from Italy

This paper analyzes a new legislative instrument designed to support inter-firm cooperation (the “network contract” - a tool introduced by the Italian government to sustain corporate competitiveness in 2009) - to see whether this type of formal cooperation represents a relevant driver of change in a firm’s strategic orientation regarding internationalization. Results indicate that the network contract is a flexible instrument used by Italian SMEs to achieve different strategies of growth and long-term objectives. The authors found that internationalization does not represent the main goal of firms participating in network contracts, however there are a few firms that have increased their business activity abroad after joining the network. At the same time, firms with a previous history of internationalization do not seem to have changed their approach regarding the international dimension. Consequently, the network contract does not represent the most suitable tool for promoting internationalization among domestic firms, although internationalization may emerge as a by-product of inter-firm relationships.