Contractors networks in public procurement projects: The case of the construction industry in the Veneto region

Our work aims to analyze the inter-organizational relationships of contractors in public procurement projects. We investigate how a firm’s network position affects its performance in public procurement practices, measured as the average value of projects won by the firm. To accomplish this objective, we adopt a social network analysis approach to analyze contractor networks. Our evidence comes from an empirical analysis of the network positions of general contractor firms involved in public procurement projects in the construction industry in the Veneto region from 2008 to 2012. Firm performance is affected by firm partnering practices, which are measured in terms of network centrality indicators. We explore how partnering ability, closeness and brokerage influence firm performance and find that a firm’s partnering ability (i.e., the number of direct firm ties within a public procurement network) is crucial in determining the success of the firm’s public procurement practices. Finally, we propose managerial and policy implications for potential regional development.