Triggering cooperation among firms: an empirical assessment of the Italian Network Contract Law

In this paper, we empirically investigate if and how the Italian Law on Network Contracts was able to trigger the establishment of networks among the involved firms. This law defined network contracts as agreements among firms to cooperate in order to improve, both individually and collectively, their innovative capacity and competitiveness in the market. It promoted them in virtually all Italian regions. During the year 2012, 213 network contracts were signed involving a total of 1083 firms. The empirical analysis shows that network contracts provide an answer to the various needs that the firms involved, if acting as single entities, cannot tackle. Indeed, on the one side, when firms that signed a network contract were characterised by mixed types of ownerships regimes, this fact negatively affected the performance of the firms involved although they ranked in the top positions in terms of correspondence with the aims of the law. The opposite holds when we consider firms within network contracts characterised by the presence of joint shareholding: this shows that despite a positive impact on performance, these networks are not specifically targeted by the law.