Network Contracts in the Italian agri-food industry: Determinants and spatial patterns

Abstract

Network contracts (NCs) have been recently introduced as industrial policy in Italy to promote competitiveness and innovation among small companies. This paper investigates the structure and the characteristics of NCs operating in the Italian agri-food system. For this purpose, a conceptual framework has been first drawn up to consider sectorial affinity and spatial proximity as factors influencing the development of networks of companies. Subsequently, data from Italian Business Register have been extracted and analysed using appropriate statistical tools, in particular local Moran spatial autocorrelation indexes. Results highlight the significant role played by agri-food companies in the NCs aknowkedged in Italy, expecially the ones established among a reduced numbers of companies. NCs involving agri-food companies are mostly characterised by local spatial correlation patterns and by horizontal aggregation among agricultural holdings, rather than by vertical structures along the food value chain. Results, however, show that several other networks involving agri-food companies can instead express more complex processes of re-organization and innovation of the food value chain. In short, the spread of agri-food NCs seems to be congruent with the Italian agrifood model in which territorial links play a significant role to face small scale limits.