Spatial Proximity and Complementarities in the Trading of Tacit Knowledge

N. Aydogan*, Th.P. Lyon

*Corresponding author for this work

Research output: Contribution to journalArticleAcademicpeer-review


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 is 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.
Original languageEnglish
Pages (from-to)1115-1135
JournalInternational Journal of Industrial Organization
Issue number8-9
Publication statusPublished - 1 Jan 2004

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