Network contract and internationalization: evidence from Italian firms

Purpose The purpose of this paper is to understand the effect of the network contract (NC) on the internationalization of Italian firms to evaluate whether and how network characteristics, management perceptions and governance influence firms' degree of internationalization (DOI). Design/methodology/approach By using the data from a survey of 350 Italian firms that joined a network in 2012, hierarchical regression analyses were applied to test four hypotheses. Findings Network size and diversity as well as management attitudes and perceptions influence firms' exports. However, only network diversity is positively related to the number of markets in which firms operate. A positive direct effect of network diversity on network managers' activities and a significantly indirect effect via network managers' activities also exist. Practical implications - Network diversity is crucial for achieving better results in foreign markets. Interacting with diverse network participants can help firms manage diversity, expressed in terms of information, resources and competencies, helping overcome the barriers that hinder the internationalization process. The presence of an efficient network manager should facilitate the achievement of firms' internationalization objectives. Originality/value This research is one of the first studies to analyze the effects of an Italian NC on firms' internationalization. From a theoretical standpoint, it adds to the literature a specific analysis that relates primarily to small firms, showing that, in this context, the results are not always consistent with those of prior studies.