Does Geographical Proximity Enhance Knowledge Exchange? The Case of the Aerospace Industrial Cluster of Centre Italy

According to the dominant literature, spatial proximity matters for successful inter-firm collaboration for innovation and more generally for knowledge transfer. This assumption is based on the argument that the tacit character of complex knowledge makes repetitive face-to-face interactions and shared cognition necessary to capture new ideas and to exchange knowledge. In contrast with this assumption, another stream of literature supports the idea that innovating requires integrating ‘global best' scientific discoveries and knowledge, despite the geographical position of potential partners. Based on field research in the aerospace cluster of Rome, this study offers empirical evidence for the assumption that geographical proximity matters for inter-firm innovation-related knowledge exchange. Although external innovation collaborations are more diffused than local ones, we found that local relationships are more effective as knowledge vehicles, because more knowledge is exchanged through local relationships than through external ties. Moreover, it is showed that the propensity to transfer more knowledge with co-located partners is accentuated for the most critical type of knowledge. Finally, it is demonstrated that the propensity to access external knowledge is unevenly distributed among cluster firms