Knowledge Externalities and Knowledge Spillovers in Social Networks: The Case of Izmir Metalwork Industrial District

Social networks are the networks based on relationships between social entities. Since social interactions are directly associated with externalities, these relationships are assumed to create opportunities for the network members by providing especially knowledge flows. In this context, the main objective of this study is to show the role of knowledge externalities in social networks. By following this aim, some theoretical derivations are delivered and survey results in a small-world network are explained. Consequently, after a brief introduction, the first section of this study consists of a theoretical model derived by including knowledge externalities in social networks. In the second section, a survey applied in Izmir Metalwork Industrial District is explained. Finally, in the third section, survey results are presented and then conclusions and discussions for further research are revealed. Contributions of this study to the related literature are three-fold. Firstly, knowledge externalities are added to the models of knowledge flows in social networks explicitly. Secondly, a questionnaire trying to measure knowledge spillovers and knowledge externalities separately is introduced and applied for the first time in the literature. Finally, such an analysis is the first for Izmir which is the third metropolitan city of Turkey.