Small businesses and the effects on the growth of formal collaboration agreements: additional insights and policy implications. Issue 46 (2nd October 2021)

• Record Type: Journal Article
• Authors: Dickson, Maria Michela; Espa, Giuseppe; Gabriele, Roberto; Mazzitelli, Andrea
• Is Part Of: Applied economics. Volume 53:Issue 46(2021)
• Page Start: 5397
• Page End: 5414
• Publication Date: 2021-10-02
• Subjects: Small firm growth -- policy support for smes -- formal collaboration agreements -- networked firms -- forms of proximity; Economics -- Periodicals; 330
• DOI: 10.1080/00036846.2021.1922595
• Languages: English
• ISSNs: 0003-6846

Abstract

ABSTRACT: The paper studies the impact of formal collaboration agreements (FCA) on firms' growth in Italy. To conduct a proper evaluation exercise, we started building a novel database of Italian firms where networked firms in 2012 (treated units) are matched with firms that did not subscribe to a formal network agreement (controls units) but possess similar observable characteristics. Then we use difference-in-differences regression models in which we employ time lags in the relationships between objective variables and control ones. We show that FCAs have a positive effect and can be interpreted as a valid means to reduce the cognitive distance from the market of firms. Moreover, the effect is mainly due to a defensive strategy. The effect is stronger for those firms that do not exploit other proximity types, namely geographical and organizational. Finally, structural characteristics play a role: younger and smaller firms avoid a 'size contraction' signing an FCA.