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Spatial Proximity and Complementarities in the Trading of Tacit Knowledge

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Author Info
Neslihan Aydogan (University of Maastricht)
Thomas P. Lyon (Kelley School of Business)

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Abstract

We model knowledge-trading coalitions in which the transfer of tacit knowledge is unverifiable and requires face-to-face contact, making spatial proximity important. When there are sufficient “complementarities” in knowledge exchange, successful exchange is facilitated if firms can meet in a central location,thereby economizing on travel costs. When complementarities are small,however, a central location may be undesirable because it is more vulnerable to cheating than a structure involving bilateral travel between firms. We believe that our framework may help explain the structure and stability of multimember technology trading coalitions such as Sematech and Silicon Valley.

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Paper provided by EconWPA in its series Microeconomics with number 0404004.

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Length: 38 pages
Date of creation: 14 Apr 2004
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Handle: RePEc:wpa:wuwpmi:0404004

Note: Type of Document - pdf; pages: 38
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Related research
Keywords: Tacit Knowledge; Clusters; Knowledge Trading; Complementarities. Spatial Proximity;

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Find related papers by JEL classification:
L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
O3 - Economic Development, Technological Change, and Growth - - Technological Change
R1 - Urban, Rural, and Regional Economics - - General Regional Economics

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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Nobuaki Hamaguchi & Yoshihiro Kameyama, 2006. "Communication Externalities on the Knowledge-based Firms in Metropolitan Areas: Case Study of China and Korea," Discussion Paper Series 182, Research Institute for Economics & Business Administration, Kobe University. [Downloadable!]
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