Interfirm Relationships and Business Performance

Business networks can play an important role in firm growth, but in many developing countries, limited information sharing systems and poor contract enforcement mechanisms may make it difficult for businesses to establish relationships with the best set of partners. Governments in some developing countries work to address this challenge by organizing business associations that are meant to promote networking. This study evaluates one such program in Nanchang, China in which some firm managers are randomly assigned to participate in small group meetings for one year. Variations in the intervention will offer insight into the mechanism behind the impact of business connections and the optimal design for networking programs.

Policy implications 
Encouraging owners' participation in business associations can help young enterprises grow more quickly.
Cai, J., & Szeidl, A. (2016). Interfirm relationships and business performance. The Quarterly Journal of Economics.