Family firm network strategies in regional clusters: evidence from Italy

Plain English SummaryFamily firms are key in supporting local development, especially in regional clusters. However, while it is well established that their strategies differ from other (non-family) firms, it is still unclear what is their networking behaviour for supporting knowledge exchange-and thus innovation. This paper provides an empirical overview of this phenomenon, by analyzing an Italian case study: the Parabiago footwear cluster. The results show that (a) family firms are more proactive in establishing network relationships; (b) family firms tend to exchange knowledge with other family firms, while non-family firms do not show the same homophilous approach. Overall, this indicates that policies for clusters need to balance support for distinct business types and recognize the familiness characteristics of regional productive structures.Knowledge networks in regional clusters are fundamental to support innovation and local development. Within clusters, family firms are key in creating business opportunities and supporting the establishment of inter-organizational networks. Yet, their role within regional clusters for knowledge transfers is still not well understood, especially in comparison with non-family firms. This paper applies Exponential Random Graph Models (ERGMs) to network data collected from the Parabiago cluster, one of the most important Italian footwear clusters, to contribute to a better understanding of the network strategies of family firms. We identify distinct network strategies associated with the cluster firms, accounting for different knowledge exchange types: technological, market, and managerial. In our modelling, we control for firm-level attributes and dyadic-level attributes, such as geographical distance and cognitive proximity between cluster firms. Our results suggest that the proneness of family firms to grow networks is highly robust relative to non-family firm relationships, irrespective of knowledge types being exchanged. Moreover, family firms tend to establish connections with other family firms, showing the presence of homophily in their networking approach; however, non-family firms are rather different, since they do not have the same homophilous approach when it comes to exchange knowledge with other non-family firms. These results indicate that the nature of ownership is driving knowledge exchange differences. This key feature of family-only relationships in clusters may help managers and policymakers in devising more effective and targeted cluster strategies.