We organized business associations for the owner-managers of young Chinese firms to
study the effect of business networks on firm performance. We randomized 2,820 firms
into small groups whose managers held monthly meetings for one year, and into a "no-meetings"
control group. We find the following. (i) The meetings increased firm revenue by 8.1%,
and also significantly increased profit, factors, inputs, the number of partners,
borrowing, and a management score. (ii) These effects persisted one year after the
conclusion of the meetings. (iii) Firms randomized to have better peers exhibited
higher growth. We exploit additional interventions to document concrete channels.
(iv) Managers shared exogenous business-relevant information, particularly when they
were not competitors, showing that the meetings facilitated learning from peers. (v)
Managers created more business partnerships in the regular than in other one-time
meetings, showing that the meetings improved supplier-client matching.
