Spatial Proximity and Complementarities in the Trading of Tacit Knowledge

38 Pages Posted: 6 Mar 2004

See all articles by Neslihan Aydogan

Neslihan Aydogan

University of Maastricht - Faculty of Economics & Business Administration

Thomas P. Lyon

University of Michigan, Stephen M. Ross School of Business

Date Written: February 13, 2004

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.

Keywords: Tacit knowledge, clusters, knowledge trading, complementarities

JEL Classification: L1, O3, R1

Suggested Citation

Aydogan, Neslihan and Lyon, Thomas P., Spatial Proximity and Complementarities in the Trading of Tacit Knowledge (February 13, 2004). Available at SSRN: https://ssrn.com/abstract=514262 or http://dx.doi.org/10.2139/ssrn.514262

Neslihan Aydogan

University of Maastricht - Faculty of Economics & Business Administration ( email )

P.O. Box 616
Maastricht, 6200 MD
Netherlands
+31 43 388 4986 (Phone)

Thomas P. Lyon (Contact Author)

University of Michigan, Stephen M. Ross School of Business ( email )

701 Tappan Street
Ann Arbor, MI MI 48109
United States
734-615-1639 (Phone)

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