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Too Many Cooks Spoil the Broth? Geographic Concentration, Social Norms, and Knowledge Transfer

Advances in Strategic Management, Geography, Location, and Strategy, Volume 36, Forthcoming

Tuck School of Business Working Paper No. 2767610

HEC Paris Research Paper No. SPE-2016-1175

42 Pages Posted: 27 Oct 2016 Last revised: 28 Jan 2017

Giada Di Stefano

HEC Paris

Andrew A. King

Tuck School of Business at Dartmouth

Gianmario Verona

Bocconi University - Department of Management and Technology; SDA Bocconi

Date Written: October 25, 2016

Abstract

A long tradition in social science research emphasizes the potential for knowledge to flow among firms co-located in dense areas. Scholars have suggested numerous modes for these flows, including the voluntary transfer of private knowledge from one firm to another. Why would the holder of valuable private knowledge willingly transfer it to a potential and closely proximate competitor? In this paper, we argue that geographic concentration has an effect on the expected compliance with norms governing the use of transferred knowledge. The increased expected compliance favors trust and initiates a process of reciprocal exchange. To test our theory, we use a scenario-based field experiment in gourmet cuisine, an industry in which property rights do not effectively protect knowledge and geographic concentration is common. Our results confirm our conjecture by showing that the expectation that a potential co-located firm will abide by norms mediates the relationship between geographic concentration and the willingness to transfer private knowledge.

Keywords: Geographic Concentration, Density, Knowledge Transfer, Social Norms, Field Experiment, Hospitality Industry

Suggested Citation

Di Stefano, Giada and King, Andrew A. and Verona, Gianmario, Too Many Cooks Spoil the Broth? Geographic Concentration, Social Norms, and Knowledge Transfer (October 25, 2016). Advances in Strategic Management, Geography, Location, and Strategy, Volume 36, Forthcoming; Tuck School of Business Working Paper No. 2767610; HEC Paris Research Paper No. SPE-2016-1175. Available at SSRN: https://ssrn.com/abstract=2767610

Giada Di Stefano (Contact Author)

HEC Paris ( email )

1, rue de la Libération
Jouy-en-Josas, 78351
France

HOME PAGE: http://www.giadadistefano.com

Andrew King

Tuck School of Business at Dartmouth ( email )

Hanover, NH 03755
United States

Gianmario Verona

Bocconi University - Department of Management and Technology ( email )

Via Roentgen 1
Milan, MI 20136
Italy

SDA Bocconi ( email )

Via Bocconi 8
Milan, Milan 20136
Italy

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