Abstract
Cluster is a favorable location of knowledge diffusing and creating. The focal firm’s strategy can both influence and be affected by the inter-firm relationships and knowledge transfer which take place within the cluster. By an analysis framework for knowledge transfer, the text explains the role of a focal firm in the evolution of a cluster and analyses how a focal firm in cluster can modify the knowledge nature and adopt different types of supply relationship to control the range of knowledge diffuse and increase the effectiveness of knowledge transfer. Then, the text constructs an interpretative model. According to the model, the text analyses the evolution of the relationships between the focal firm and its suppliers.
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