Inter-organizational networks as a strategic response to current economic challenges. The Italian experience of the “network contract”: analysis of networks formation, goals and governance

Abstract Considering the strategic relevance of inter-organizational aggregation, this paper aims to analyse how small and medium-sized Italian firms have used the ‘network contract’, a legislative tool recently introduced by the Italian government to sustain corporate competitiveness. The following aspects are analyzed: strategic motives that underlie network formation, type of activities undertaken, characteristics of participant firms, modes of network organization and governance rules. These aspects all contribute to understanding network efficacy in promoting small firms’ development in the long term. The empirical analysis is mainly qualitative in nature: it focuses on three case studies belonging to the mechanical engineering sector. Results indicate that the network contract is a flexible instrument, used to achieve different strategies of growth and long-term objectives, while financial incentives and tax reliefs planned by the Italian government do not represent a key driver to collaboration.