Lunch Seminar Economics (LSE) - 2021/2022
Interviene: Elena Grinza, Politecnico di Torino
Title: Network Agreements: New Empirical Evidence on Firms and Workers
Authors: Francesco Devicienti, Elena Grinza, Alessandro Manello, Davide Vannoni
Abstract: Networking activities of firms have attracted much interest in the economics and management literature, from both a theoretical and empirical perspective. Using administrative matched data on the population of incorporated Italian firms, we provide novel evidence on the effect of participating to formal business networks (i.e., ``contratto di rete'') on firms' and workers' outcomes. After controlling for unobserved fixed heterogeneity, non-random involvement into formal networks, and detailed workforce and firm characteristics, we find that a firm's participation to formal networks has a significant positive effect on its productivity (both labor and total factor productivity), as well as on profitability and employment. However, by estimating multiple-way fixed effects wage regressions, we show that such positive effects on firms do not translate into higher wages for workers. We finally show that the impacts on both firms and workers are somewhat heterogeneous. Formal networks are particularly beneficial to smaller firms operating in the manufacturing sectors. On the other hand, workers in weaker segments of the labor force (e.g., part-time, female, migrant, low-skilled) are found to experience a significant (though small) negative impact on wages.