Abstract
Knowledge spillover, exchanging ideas among individuals, is an important aspect in industry clustering. Absorption, transformation and accumulation of knowledge all occurs within the clusters, and knowledge innovations by individual enterprises (knowledge receivers or demanders) in the clusters through digesting and absorbing external knowledge spillovers lead to replacement of existing mainstream technologies. The objective of this study is to throw light on industry clustering in China by analyzing how various factors affecting the effects of knowledge spillovers in a cluster, and how to consider the effects of knowledge spillover in decision-making on positioning an industry cluster.
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