Local and global links and the diffusion of knowledge in clusters: a simulation model

Andrea Morrison
Utrecht University,

Roberta Rabellotti
Semeq, Universita del Piemonte Orientale

Lorenzo Zirulia
Universita di Bologna

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     Last modified: February 29, 2008

Abstract
In the literature on industrial clusters there is an increasing attention on knowledge flows. Some studies have shown that firms with higher knowledge endowment are central in the cluster’s knowledge network and act as technological gatekeepers connecting the cluster with external knowledge sources (Giuliani and Bell, 2005). However, where knowledge distribution is uneven, firms with stronger knowledge bases may search for potential partners outside the local area, being more external stars than gatekeepers of knowledge (Bathelt et al. 2004; Morrison, 2008).To theoretically explore these different scenarios, we extend Cowan and Jonard's model to an economy where there are two clusters to take into account the importance of distinguishing between local within the cluster and global links outside the cluster.In the model, both the positive and the negative role of leading firms are considered. When experts’ connections are dense, these agents tend to exhaust in this way their willingness to barter. When clusters are similar in size and knowledge endowment, more external links can worse cluster performance. This is due a "substitution effect": experts (the equivalent of leading firms in the empirical literature) prefer to exchange knowledge with other experts outside the cluster instead of exchanging knowledge with non-expert firms within the cluster. However, this is not the case for a small cluster in asymmetric set-up. Whenever experts’ links are only way to access knowledge outside the cluster, then the negative consequences of the substitution effect are more than counterbalanced by the positive consequences of accessing some external knowledge