Knowledge exchange in clusters: The contingent role of regional inventive concentration

Abstract Geographic clusters confer advantages to collocated firms, in particular access to local know-how. This article argues that the access to local know-how is contingent on the extent to which inventive activity is concentrated in the cluster. We draw on sociological theories of generalized exchange to argue that contrasting logics of exchange emerge in geographic clusters that have opposing effects on the extent to which firms benefit from collaborating with local organizations and source local knowledge. A longitudinal data set of 1903 firms engaged in nanotechnology research is used to examine the relationship between firm co-authorships on scientific articles with firms and public research organizations (PROs) and firm inventive performance. Results indicate that when cluster-level firm inventive concentration is high, collaborations with local firms are associated with lower inventive performance. We also find that firms source less local knowledge for their own inventions when firm inventive concentration is high. In contrast, concentrated inventive activity among PROs increases the positive relationship between collaborations with local PROs and firm inventive performance. Results also show firms source more knowledge from local PROs when local PRO inventive concentration is high. The findings suggest that inventive concentration both helps and hinders spill-over of cutting-edge knowledge.