Contractual Networks: an Organizational Model to Reduce the Competitive Disadvantage of SMEs Located in Less Developed European Regions. A survey in Southern Italy

The specific constraints resulting from Italian enterprises’ small size of could be effectively overcome through cooperation strategies and through the signing of network contracts. International literature highlighted that business networks - which are considered a “subject of law” - are more effectively governed and, therefore, are more effective in allowing partner enterprises to improve their economic performance and survive over time. By combining qualitative and quantitative analysis, the paper tests this hypothesis and analyzes the performance in Southern-Italy enterprises that have joined business-networks ‘with legal subjectivity’ compared to enterprises participating in ‘contractual’ business-networks. Findings demonstrate that in an unexpected way, only 16% of all registered business networks are actually operative: among the networks-subject approximately 30% are active networks; a similar trend was recorded for the network-contracts: only 14% are really active. Moreover, performance measures (i.e. profitability measures, financial situation indicators, debt sustainability) are different for enterprises belonging to networks with legal subjectivity compared to those involved in contractual networks by considering the years following the subscription of the network contract. In light of the above, it is proposed to verify the conditions to strengthen the network of SMEs in the South of Italy, with a view to their competitive and innovative capabilities as well as their internationalization processes, and to promote the establishment of networks with legal subjectivity as an effective tool to strengthen their competitiveness in spite of external diseconomies, and in particular to improve its creditworthiness.