The dynamic impact of inter-firm network agreements

Abstract

This paper sheds new light on the dynamic effects of inter-firm network agreements on firm performance and investigates whether the specific combination of partner profiles triggers heterogeneous causal effects. Using a staggered difference-in-differences design, we find that participation in network agreements has a persistent impact on firms’ revenues, value added, and EBITDA that is amplified at least through the third year of collaboration. Our results show that micro firms benefit more from collaboration in network agreements, especially when they enter into relationships with larger partners. In addition, companies benefit more from network ties when most of their partners belong to the same travel-to-work area.