Communication Externalities on the Knowledge-based Firms in Metropolitan Areas: Case Study of China and Korea

This paper provides some evidence on communication style that serves as the contact tool and its related external economies to knowledge-intensive production and innovation within the emerging high-technology based industrial clusters in metropolitan areas of China and Korea. Our unique data-set from questionnaire survey enables us to examine the firms' behavior of communication regarding the choice of communication mode, how often, with whom, and for what purpose. Such analysis provides insights about actual relationships among business partners of industry-university-government in each cluster of Zhongguancun Area (Beijing), Seoul Digital Complex and Daedeok Valley (Daejeon). Our studies demonstrate that 1) with suppliers firms contact with high frequency but with less face-to-face meeting opportunities, 2) with customers and banks/investors but more with face-to-face contact, as common characteristic, 3) and that firms' long-term experience in the market is helpful to construct such meaningful communication network in Seoul Digital Complex. However, we could not show fully that communication externalities generated by the face-to-face contact influence the innovative output of firms.