Reciprocal links refer to reciprocal mention and link trading. In general, it's not good for your site's Google ranking in the short term.
For the short-term, though, it can help your search engine rankings because webmasters have begun to take notice of how often people reference others' sites when doing product research with their favorite search engines. For example, two companies may make a trade agreement that they each provide links on their web page leading back to one company from the other company's website via a hyperlink or an anchor text reference.
As far as SEO is concerned, it is not advised (unless you don't really care about getting ranked at all). It will enable bots to better identify your site within the search engine's index, but Google and other major search engines frown on these kinds of practices. They understand that there are companies that find ways to manipulate their system and will lower your rankings if it happens enough. The best thing to do is ORGANICALLY try to connect with experts in your field or companies you might like to work with.
Although they have helped a little bit in the past, it's not worthwhile to work on building up links just for link-value purposes because over time Google has gotten smarter about what constitutes an unnatural link profile and that traffic from those types of links can be very fleeting. What I'm saying is don't go out and try to build traffic by creating links to your site. Google began penalizing this behavior a couple of years ago, and you don't want to get caught in that net.
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